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Non-profit hospitals take aggressive measures to recoup consumer debts

5690893 – senior couple at home reacting to many bills

Two in 10 American consumers are struggling to pay a medical debt, according to a study recently published by JAMA, the American Medical Association’s online journal.

While that statistic may be startling, a series of news reports that followed also raised eyebrows. The reports highlighted the extreme measures that nonprofit hospitals are taking to force patients to pay their bills, including garnishing patient’s wages and taking them to court.

National Public Radio followed 24-year-old Daisha Smith into a Virginia courtroom one June morning after her overnight shift working as a caregiver in a group home. Smith didn’t realize she still owed her local hospital until money started disappearing from her paycheck.

Smith spent two weeks at Mary Washington Hospital in Fredericksburg in 2017. She was uninsured, working for $11 an hour in retail. She was not told about the hospital’s policy to offer free or reduced-fee care for those whose incomes fell below $25,000 a year. She also wasn’t told that the hospital had sued her for the money.

She found out when she asked why $600 had been taken out of her paycheck, leaving her with $1,400 to pay her $1,005 rent and cover other expenses.

“I literally had no food in the house,” Smith told NPR.

She was far from alone. The JAMA study and news reports looked at debt-collections by Virginia hospitals in 2017 and found 36 percent of Virginia’s hospitals sued their patients and garnished their wages to collect unpaid bills. Five hospitals accounted for more than half of all lawsuits and all but one were non-profits.

“Hospitals were built — mostly by churches — to be a safe haven for people regardless of one’s race, creed or ability to pay,” Martin Makary, one of the JAMA study’s authors and a surgeon and researcher at Johns Hopkins Medicine told NPR. “They’re supposed to be community institutions.”

The day after the NPR story was published, officials at Mary Washington Hospital announced they’d suspend their practice of suing patients over unpaid bills.

There are no statistics indicating how widespread the practice is nationally, however other news organizations have uncovered the practice in other states.

ProPublica recently reported that Methodist Le Bonheur Healthcare in Memphis, Tennessee had filed 8,300 collections lawsuits over the past five years, including against its own employees. Officials there also announced they would re-evaluate their collections policies after the report.

Have you been saddled with a big medical debt and been subject to aggressive collections by a hospital? Share your tips and stories with Voices for Affordable Health.