According to an investigation by Kaiser Health News (KHN), thousands of American hospitals are using aggressive debt collection practices, including lawsuits, garnishing wages, and reporting patients to credit agencies to get payment. Meanwhile, a recent poll revealed that nearly 40% of American adults have had to choose between paying for medical care and purchasing other essentials like groceries.
While hospitals have been criticized for these sorts of aggressive tactics in the past, the investigation shows just how commonplace they are. KHN investigators found lawsuits against patients in all regions of the country from all types of hospitals, including top academic institutions and public university systems, for-profit and non-profit providers, and religious hospitals.
The investigation documented four primary aggressive collection methods used by hospitals: reporting patients to credit rating agencies, selling patients' debt to debt collectors, denying non-emergency care to patients with outstanding debt, and suing or taking other legal action like placing liens on property and garnishing wages.
Investigators also report that 40% of the hospitals they researched provided no information about their collection methods on their websites.
"People don't know what's going to happen to them. It can be terrifying," said consumer attorney Tracy Douglas with Bet Tzedek Legal Services.
Hospital representatives and other industry officials claim that they're careful about what tactics they use to collect on debts, but the KHN investigation discovered that patients rarely get the financial assistance they deserve. The standards for qualification vary widely from hospital to hospital, and officials do little to assist patients with the payment process.
"The system doesn't work," Jared Walker, the founder of the financial aid nonprofit Dollar For, told reporters. "Patients can't find the information they need. Half the time, when they do apply for assistance, they never hear back. Basically, hospitals do what they want, and there is no accountability."
Even in cases where patients have qualified for forgiveness, they still report being pursued by debt collectors. Some hospitals continue to sue for payment despite claiming that they've stopped all legal actions against patients. While some hospitals say they won't take aggressive actions against patients, the policies allowing them to do so remain in place, leaving patients vulnerable at all times.
In addition to forcing people to choose between feeding themselves and paying for medical care, these methods also don't work: areas where aggressive collection tactics are prohibited report lower levels of medical debt relative to other regions.
"We don't want to promote the concept that medical bills just go away, especially for those who are able to pay," said the head of patient accounts at Stanford Health nonprofit hospital system, Michael Beyer.
