Hospitals take indebted patients to court--even if they also get charity payments for their care Posted by mitcka at 12/22/08 05:16 PM

A ground breaking multi-part series in this week's Baltimore Sun shines some light on the debt collection practices used by hospitals, even hospitals that accept government charity care payments for patients who can't pay their bills.

An eight-month investigation by The Sun found that over the past five years some of Maryland's 46 nonprofit hospitals have received millions of surplus dollars from the payment system even as they sued tens of thousands of patients over unpaid bills. Many of these suits have been filed against patients in the poorest areas of the state.

With more than 132,000 cases filed against people in Maryland alone, and at least $100 million in judgements against hospital patients, its no wonder that medical care has become a top cause of bankruptcy.

While the numbers tell a story of national implications for our uncertain economy, the individual stories tell us of a debt collection bureaucracy with no oversight and little ethical constraint.

White had health insurance, but it didn't cover the bulk of her care. When bills started showing up about a month after her discharge, she signed up for the financial assistance program commonly called charity care.

A few months after her discharge, Hopkins sent her a ruling on her request for assistance that read, "Your responsibility is zero," according to court records. White said she rejoiced.

"I was saying, 'Oh gee, thank the Lord, because any time you have an operation like this, you know it's going to be a lot,'" she said.

But the bills kept coming. When her daughter asked why, the hospital said that charity care only covered one day's charges. Hopkins officials said it was possible for charity care to be approved for one day.

In January 2007, Bayview sued White in Baltimore City Circuit Court, stating in part that she "refuses to pay the amount due." That comment bothered White, who mailed a typed note to the court stressing that she "never refused to pay the bill," but simply didn't have the money to do so.

She said that she was "grateful" to the Hopkins surgeon who "saved my life" but that she and her husband, Charles, got by on $1,080 a month from Social Security and $152 in food stamps. "I have a little checking account that I pay my bills from. There is a little over $1,000 in that; so you see I'm in no position to pay all this money for the hospital bill," she wrote.

A month later, White asked the hospital again for financial aid, but was told the bills were "too old" to be eligible, according to hospital records.

The State of Maryland pays hospitals a charity care payment each year to make up for the bills that people can't pay themselves. But not every state has such a system, and it is likely that debt collection efforts are even more fierce elsewhere. One Maryland hospital reported that it will sue people who have a mortgage, while another reported suing people who have two cell phones and a savings account. Well, that could be any of us.

Take a look at the second part in the series here--where the Sun follows poor debtors through the legal process against a cadre of specialized law firms. Third part coming soon.

comments (4)

1 Posted by Bob at 01/14/09 12:13 AM

I had neck surgery and the insurance paid its contracted rate of $35,000. The hospital billed about $38,500 and I had to pay $3500 out of pocket. The hospital marked up a $78 screw to $455 each times 6 screws and a metal plate costing $450 to $5500. These are over 1000 percent markups! The government fined gas stations for marking gasoline up 30 percent during Katrina. Yet, the hospitals go unpunished for 1000 percent markups that cheat their patients because of their greed. Hospitals employ unethical billing practices. They charge $165 per minute in a recovery room, call for an orderly to take the patient to a room and it takes 15 minutes for the orderly to arrive. That 15 minute wait cost almost $2500! Why aren't hospitals investigated and fined?

2 Posted by Jodi de Vries at 01/15/09 05:10 AM

My father recently lost a long-fought battle with three different cancers. During the course of one of his treatments, The Fred Hutchinson Cancer commonly known as "The Hutch" wanted him to try some groundbreaking new treatment called ECP, of which he received a three-page letter confirming the approval from Regence BlueShield to cover the expenses.

My father had this treatment from September 2006 until January 2007. He quit the therapy because it was having no effect. At the end of April 2007, my father was struggling heavily with cancer when in the mail he received a bill from The Hutch for a whopping $85,000.00. Regence had rejected all claims toward the treatment.

My father passed away long before he was ready and went down fighting. He ended up paying $2500.00 a month until he died simply because he had no more fight left in him to fight the bill. Now the bill has been sent to collections.

I am broken-hearted that my father is gone, and even more so that his name is tarnished with the dirt of greedy and corrupt healthcare.

3 Posted by A. Brickner at 02/13/09 06:31 PM

It is about time that the nonprofit hospitals live up to the IRS Code and pay their share of covering the care for the poor, uninsured and working poor who do not and can not afford the U.S. health care sustems costs!

4 Posted by Michelle Morin at 03/04/09 02:21 PM

The biggest problems with health care is that it is 1) being run by Insurance companies--both private and public 2)being regulated to death, and 3) being hurt by Americans themselves, especially those who do not understand that there is no such thing as a free lunch. Ultimately someone must pay. If you don't pay a small tax now along with 40 million others, a huge chunk of change WILL come out of your own pocket in the future because a program died from lack of funding by the other 39.9 million who also didn't pay that extra one dollar in taxes.
I am a registered nurse with a long career in a rural facility that is struggling to survive on a negative income--to the point where none of our facility's employees will receive so much as a cost of living raise for the next couple years.
I am all in favor of health care reform. I beleive in the elimination of insurance companies and the establishment of a universal health care system. I believe that reform should help our ailing hospitals, home care agencies, and long term care facilites instead of treating them as the enemy. For the only real enemy in health care right now is ourselves.
First America MUST clarify its definition of health care. As it now stands that definition is a muddled mess. Is health care a moral imperative or a business? Those in need of care expect it to be a moral imperative delivered at ANY cost. But the message to health care from taxpayers, our government, and insurance companies is that they expect healthcare to behave as a business that operates cheaply so that taxes can be cut and insurance companies can continue to demand that hospitals give them deeper discounts that the insurer can then pass on as profits to stockholders rather than reduce the cost of insurance. Second Americans need to decide on what quality really is,what it really costs, and what we are willing to pay for. The old adage that you can't buy a cadillac on a volkswagon budget is as true for health care as it is for anything else.
Every year I have watched as insurance companies, Medicare, and Medicaid have reduced payments to health care. Imagine if you went into a grocery store and said to the owner, "I want a gallon of milk but I will only pay you $1.00 for it because my renters don't want their rent to go up and my stockholders want me to pay them higher dividends. I do not care that it cost you $2.00 to get the milk and if you cut back on other products in order to continue to give me the very best milk money can buy I will accuse you of fraud, abuse, and poor quality." Insane isn't it? But that is exactly what has happened to America's health care over the last 25 years.
Like most nurses, I believe that the provision of health care in the safest most effective possible manner is a moral imperative. But that multi-million dollar MRI wasn't provided to your hospital because of a moral imperative. Neither were the intravenous pumps or the drugs or the sheets and pillows, blanket warmers and thousands of other supplies necessary to ensure patient comfort and quality care. They were provided by manufacturers looking to make a profit off of a hospital that has to employ 30 or more people for every one patient in order to ensure quality care. So ask yourself, when your not for profit hospital is drowning financially because Americans don't want to shell out an extra buck in taxes, who do you possibly think is going to pay for charity care? Your church? You?