Some of the largest hospital systems in the U.S. aggressively pursue their patients for repayment using lawsuits, liens, and wage garnishments, according to a new review by Johns Hopkins University and Axios.
The analysis of hospital billing practices from January 2018 to July 2020 found hospitals filed nearly 39,000 lawsuits against patients. In all, the actions wanted to collect around $72 million.
“The poor or uninsured often bear the brunt of such actions,” Johns Hopkins University representative Christi Walsh told ProPublica. “In times of crisis you start to see the huge disparities,” she lamented.
Most hospitals charge patients exponentially more than what it costs them, between five and 10 times more than the cost of the service, according to the study. Hospitals argue the tactic is essential for negotiating insurance rates.
But rising deductibles and out-of-pocket costs often leave patients with unmanageable medical debt. In fact, 58% of all debt collections in the U.S. are healthcare-related. Hundreds of thousands of Americans file bankruptcy because of it each year.
A shocking two-thirds of the hospitals surveyed are considered nonprofit organizations, meaning they are tax-exempt as charitable operations and exist as a public service. The study found most nonprofit hospitals have a low rating on the Lown Institute Hospitals Index, meaning they are not doing enough charity care or providing adequate financial assistance to the community. These practices continue despite an Affordable Care Act requirement that institutions refrain from “extraordinary debt collection.”
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Froedtert Hospital in Milwaukee filed seven liens against 21-year-old Tyler Boll-Flaig, an uninsured Wisconsin man who spent several days in their intensive care unit last June. A driver racing at 100 mph slammed into Boll-Flaig’s car, killing his teenage brother and shattering his jaw into pieces. A judge sentenced the driver to eight years in prison in February.
In all, the level one trauma center sought nearly $250,000 from Boll-Flaig for its services, according to researchers and ProPublica. A review of civil cases in the Wisconsin Circuit Court database by Audacy on June 16 found nearly $70,000 in hospital liens still outstanding.
“The lien process does not impact a patient’s personal property and is intended to recoup expenses from settlement proceeds from the negligent party’s insurance company,” said Stephen Schoof, a Froedtert Health spokesperson, when questioned by ProPublica.
New York state was the worst. Between January 2018 and December 2020, 51 hospitals filed lawsuits against 1,800 patients, ProPublica reported.
During the pandemic, a significant number of hospitals eased off their collection efforts. Johns Hopkins found a 90% drop in legal actions throughout the first half of 2020. But many hospitals continued pursuing patients despite the global shutdown pushing many into poverty.
As of January 1, federal law requires hospitals to publish the prices of at least 300 “shoppable services” for consumers to have. In the past, rates have mostly been kept secret or buried deep on websites. A separate study released this week found most hospitals are not following the federal requirement to publish price lists. Only one-quarter of the highest-grossing hospitals have complied, according to the Journal of the American Medical Association.