Memorial Hermann Lawsuits: Hidden Camera, Billing, and Settlements

Memorial Hermann Health System, one of the largest nonprofit hospital networks in Texas, is facing a $100 million class action lawsuit filed in September 2025 after a former patient care director was caught hiding cameras in restrooms at Memorial Hermann The Woodlands Medical Center. The Memorial Hermann lawsuits on record also include a separate nurse’s suit tied to the same scandal, a federal billing settlement, a dispute with Blue Cross Blue Shield of Texas, a Texas Attorney General compliance agreement over patient record access, and an older collection suit against an uninsured patient.

The $100 Million Hidden Camera Class Action

Attorney Tony Buzbee filed the class action in Harris County District Court on September 11, 2025, naming Memorial Hermann and former employee Robert Pinon Shrader as defendants and seeking more than $100 million in damages.¹ Five current or former employees brought the suit on behalf of what the complaint describes as “thousands of individuals from in and around Texas” who used the affected restrooms during Shrader’s employment, including employees, contractors, patients, guests, and other visitors.²

The complaint alleges invasion of privacy, intentional infliction of emotional distress, and negligence. The negligence claim centers on the hospital’s alleged failure to inspect or maintain the ceiling tiles where the cameras were hidden, reportedly for months.³ The plaintiffs are seeking a jury trial.² Attorney Meredith Drukker Stratigopoulos said the firm expected “a very large pool of claimants” and that the case “appears to have thousands of claimants.”

On September 17, 2025, Memorial Hermann said it would “vigorously defend” itself and asserted that Shrader’s conduct “occurred outside the scope of his employment, contrary to our policy and without our knowledge.”² As of mid-2026, no class certification ruling, settlement, or trial date has been reported.

What Investigators Found

Construction workers servicing the HVAC system at Memorial Hermann The Woodlands Medical Center discovered a wireless video camera in the ceiling of a second-floor unisex restroom on August 21, 2025.⁴ Four days later, a second identical camera was found in the ceiling of another single-occupancy unisex restroom one floor up. Both restrooms were accessible to staff, patients, families, and visitors.

Hospital security traced an SD card from the first device to Robert Pinon Shrader, 41, of Magnolia, a patient care director at the hospital. A search of his desk turned up a second SD card and another hidden camera still in its packaging.⁴ Investigators recovered more than 300 videos and images depicting at least seven identified victims in various states of undress.⁵ The Montgomery County Sheriff’s Office said the cameras could have been in place since the beginning of 2025. By October 2025, eight victims had been positively identified.⁶

Memorial Hermann fired Shrader, said it conducted security sweeps across the Woodlands campus, and reported that his personnel records showed no prior complaints. The hospital called the conduct “illegal and reprehensible.”⁴

A Nurse’s Separate $1 Million Lawsuit

Before the class action was filed, a registered nurse identified only by her initials filed suit on September 5, 2025, in the 457th Judicial District Court of Montgomery County. The case, A.D. v. Robert Pinon Shrader (Cause No. 25-09-14572), seeks more than $1 million in damages.⁵ The nurse worked in the hospital’s medical-surgical unit and alleges Shrader secretly recorded her and others.⁷

Her attorney, Anna Greenberg of Blizzard Greenberg, PLLC, said the suit initially named only Shrader but would “likely develop into eventually including the hospital as well.”⁷

The Criminal Case Against Shrader

The civil cases are proceeding alongside a criminal prosecution. Shrader was arrested at his home on August 27, 2025, on a warrant for invasive visual recording and later charged with seven felony counts.⁸ In January 2026, a Montgomery County grand jury indicted him for invasive visual recording in a bathroom or dressing room.⁹ No plea has been reported, and the criminal case remains pending.

Suit Against Blue Cross Blue Shield of Texas

Not every Memorial Hermann case is a defense. On May 5, 2022, the system sued Blue Cross Blue Shield of Texas in federal court, alleging the insurer owed more than $3 million in unpaid claims for emergency and post-stabilization care provided to roughly 100 Blue Advantage plan members.¹⁰

Memorial Hermann alleged BCBS began improperly denying emergency claims in 2015, after the insurer reportedly lost $400 million on the Affordable Care Act marketplace the previous year, and that denials jumped from about one per month to 40. BCBS defended the denials by citing Memorial Hermann’s out-of-network status and pressed the hospital to transfer stabilized patients to in-network facilities. According to court filings, when asked whether patients should be moved against their will, a BCBS representative allegedly said, “that’s what you have security for.”¹⁰ Memorial Hermann sought a jury trial and the denied amounts along with interest, penalties, and attorney fees.

$5.6 Million Federal Billing Settlement

In October 2016, Memorial Hermann agreed to pay $5,652,628 to resolve allegations that it violated the federal Civil Monetary Penalties Law by submitting upcoded claims for outpatient services to federal healthcare programs. The government alleged the system had automatically appended billing modifiers 59 or 91 to procedure codes, which would have resulted in higher reimbursements. Memorial Hermann voluntarily self-disclosed the issue to the Office of Inspector General before the settlement.¹¹

Texas AG Agreement on Parental Access to Records

In 2022, the Texas Attorney General’s Consumer Protection Division opened an investigation into Memorial Hermann over allegations that its patient portal misled parents about their right to access medical records for adolescent children ages 13 to 17. The portal’s FAQ had suggested state law prohibited parental access, when the actual barrier was a limitation in the hospital’s Cerner software.¹²

Memorial Hermann entered into an Assurance of Voluntary Compliance on November 16, 2023. The hospital agreed to update its portal language to describe the issue accurately as a technological limitation, give parents clear instructions for obtaining records in the interim, and notify the Attorney General once a new Epic-based portal was operational. The agreement carried no civil penalties or attorney fee payments, and Memorial Hermann did not admit wrongdoing.¹³

Collection Suit Against an Uninsured Patient

In December 2012, Memorial Hermann sued Ignacio Alaniz, a 55-year-old uninsured patient, for $456,675 in medical bills from treatment after a car accident the previous January. Alaniz had been hospitalized for roughly a month with nine fractured ribs and two collapsed lungs. He alleged a hospital financial office employee told him the charity program would cover most of the cost after a $100 good-faith payment, but the hospital stopped communicating about the application and filed suit instead.¹⁴

Alaniz filed a counterclaim alleging Memorial Hermann charged uninsured patients double or more what it accepted from insured patients, calling the practice unconscionable and a violation of the Texas Deceptive Trade Practices Act. The case was set for trial in October 2013; no final outcome was included in available sources.¹⁴

1
Fox 26 Houston. Woodlands Memorial Hermann Hidden Camera Lawsuit
2
Becker’s Hospital Review. Memorial Hermann, Former Manager Sued Over Hidden Restroom Cameras
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Click2Houston. $100M Lawsuit Targets Memorial Hermann, Ex-Hospital Manager Over Hidden Bathroom Cameras
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Click2Houston. Memorial Hermann The Woodlands Employee Terminated After Unacceptable Behavior
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Yahoo Finance. Nurse Files Lawsuit Against Memorial Hermann
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Woodlands Online. Update on Investigation Into Former Memorial Hermann Employee
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Click2Houston. Nurse Files $1M Lawsuit Against Ex-Manager After Hidden Cameras Found at Memorial Hermann The Woodlands
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KHOU. Robert Shrader Arrested After Hidden Cameras Found in Bathrooms at Memorial Hermann Woodlands
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Click2Houston. Former Memorial Hermann Director Indicted Over Hidden Bathroom Cameras
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Becker’s Payer Issues. Memorial Hermann Sues BCBS Texas Over Alleged $3M Owed in Payments
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HHS OIG. Memorial Hermann Health System Agreed to Pay $5.6 Million for Allegedly Violating the Civil Monetary Penalties Law
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Texas Attorney General. Attorney General Ken Paxton Secures Settlement With Memorial Hermann Health System to Ensure Parental Access
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Texas Attorney General. MHHS Agreement File Stamped
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ABC13. Memorial Hermann Sues Uninsured Patient Over Medical Bills