America's biggest hospitals vs. their patients
More than a quarter of the 100 U.S. hospitals with the highest revenue sued patients over unpaid medical bills between 2018 and mid-2020, according to new research by Johns Hopkins University provided exclusively to Axios.
Why it matters: The report suggests that, rather than being an anomaly, patient lawsuits are relatively common across the country and among the largest providers.
- “Most hospitals do not engage in this form of predatory billing. But for the ones that are, it threatens the great public trust in the medical profession,” said Marty Makary, a lead researcher of the project.
The big picture: As patients have become increasingly responsible for higher deductibles and other out-of-pocket costs, some hospitals have responded to unpaid bills by taking patients to court.
- Meanwhile, the cost of hospital care has continued to rise, and is often many times the rate Medicare pays for the same services.
- Hospitals continued these “predatory billing practices” even amid the pandemic last year, per the JHU researchers, although there were fewer court actions than in the previous two years.
- It’s unclear how much of the decrease was because of the pandemic and how much was attributable to lasting changes in billing practices.
Details: The study found that 26 of the hospitals filed nearly 39,000 court actions against patients. This is likely an undercount, as some court records were inaccessible.
- These court actions took the form of lawsuits, wage garnishments and personal property liens. Wage garnishments are court orders allowing hospitals to take part of a defendant’s paycheck, and a personal property lien is a legal claim that allows the holder to obtain access to an asset if a debt isn’t paid.
- Even hospitals that didn’t sue their patients often had charges that were several times the cost of care.
By the numbers: 16 hospitals provided complete data on the amount they sued patients for — $71.8 million altogether. Three hospitals — Westchester Medical Center, VCU Medical Center and Froedtert Hospital — accounted for more than three-quarters of the total amount sought.
- Among hospitals for which the amounts sought were available, patients were sued for $1,842 on average.
- The number of court actions decreased over time, with hospitals filing nearly 21,000 in 2018, 16,510 in 2019 and only 1,661 in 2020, although the report only analyzed court records until the end of July.
Between the lines: Nearly two-thirds of the hospitals that sued patients are nonprofits. Eight are government-owned, and only one is for-profit.
- Nonprofits also comprise around two-thirds of the top 100 hospitals, meaning they aren’t disproportionately likely to sue. But their nonprofit status makes them tax-exempt, in exchange for the provision of free or highly discounted care for patients who couldn’t afford it.
- When nonprofits sue patients who can't afford to pay, “if it’s not a violation of the letter of the...law, it’s certainly a violation of the spirit of it," Makary said.
The other side: The American Hospital Association called collection actions “a last resort."
- “Our doors are always open, regardless of a patient’s ability to pay. In total, hospitals of all types have provided more than $702.51 billion in uncompensated care to patients since 2000 for which no payment was received for patients in need,” said an AHA spokesperson in a statement.
- “The reality, however, is that the health care system must be adequately financed to ensure that hospitals and health systems are able to stay open and be there for their communities in times of need.”
The bottom line: Even some of the hospitals with the highest revenues in the country will take patients to court over bills that are, on average, less than $2,000.