Better Solutions for Healthcare

AXIOS: How America’s top hospitals hound patients with predatory billing

By Michelle McGhee and Will Chase

June 14, 2021

In February 2018, Stephen Swett went to the emergency room at Westchester Medical Center in New York seeking help for withdrawal from Suboxone, which treats opioid addiction. Swett — a 44-year old truck driver — says he sat on a gurney until he was discharged. Then in June of last year, the hospital filed a court summons, the beginning of its attempt to collect the $2,539.43 it said Swett owed for his trip.

  • I went there, and it was my responsibility for going there. But at the same time, you don’t even take my temperature, you don’t do anything, you just basically let me sit, and then you stick me with a bill and take me to court,” Swett said. “That’s what I didn’t feel was right.

The big picture: Rising deductibles and out-of-pocket costs are increasingly leaving patients responsible for bloated medical bills. A new analysis by Johns Hopkins University reveals that many of the top 100 hospitals by revenue in the U.S. use predatory tactics to pursue patients with unpaid bills.

Debt collection at any cost

Medical debt comprises 58% of all debt collections in the U.S. and has caused hundreds of thousands of Americans to file for bankruptcy. Some of the top 100 hospitals are huge contributors to the problem: Between January 2018 and July 2020, they filed tens of thousands of lawsuits and other court actions against patients. A handful of hospitals cut lawsuits in 2020, due to policy changes, but it’s unclear if these will last. According to JHU’s data, these patient lawsuits are most prevalent among governmental and nonprofit hospitals.

Why it matters: Nonprofit hospitals enjoy tax exemptions in exchange for charitable measures, but our analysis shows that most of these hospitals have failing grades on the Lown Institute Charity Care Rating, meaning they’re not meeting their obligations.

  • Furthermore, the Affordable Care Act requires nonprofit hospitals to have a financial assistance policy, and prevents hospitals from engaging in “extraordinary debt collection” unless they’ve made reasonable efforts to figure out whether a patient is covered by that policy.
  • When nonprofits sue patients who can’t afford to pay, “if it’s not a violation of the letter of the Affordable Care Act law, it’s certainly a violation of the spirit of it,” said Marty Makary, a lead author of the project.