Feb 20, 2024 - Health

How UCHealth is secretly chasing down medical debts

Illustration of red cross surrounded by concentric circles of dollar symbols.

Illustration: Shoshana Gordon/Axios

Colorado's largest hospital system collects more than $6 billion a year in revenue β€” in part by quietly filing thousands of lawsuits against patients with medical debts, a new investigation finds.

Why it matters: The way UCHealth pursues patients with unpaid bills makes it the most litigious health system in the state and clashes with the nonprofit's stated mission to "improve lives."

What's happening: The extent to which UCHealth sues people for medical debt is shielded from public scrutiny because it hires debt collectors to do the dirty work, according to a 9News and Colorado Sun investigation in partnership with the Colorado News Collaborative and KFF Health News.

Between the lines: The lawsuits are filed in the name of nondescript outside companies, rather than the hospital, and they keep a portion of the money collected. Hospital officials declined to tell the collaborative how much.

By the numbers: From 2019 to 2023, the system filed 15,710 lawsuits β€” an average of more than eight per day, the investigation found.

Of note: As a nonprofit charity, UCHealth and its network of 14 hospitals and more than 200 clinics are exempt from paying taxes.

  • The system recorded $839 million in total profits last year.

What they're saying: "They are essentially deliberately using those third-party collection agencies to obscure the fact that they are the ones suing the patients," Adam Fox at the Colorado Consumer Health Initiative, a consumer-advocacy group, told reporters.

  • "It makes it really hard for the patient to untangle."

The other side: UCHealth denies it's trying to hide anything and considers the lawsuits a necessity in the health care market.

  • Officials estimate that just 0.07% of its patient revenue comes from lawsuits, or about $5 million a year.

Zoom in: The large numbers merely reflect its volume of care, they say. "I can tell you it is a common practice," Jacki Cooper Melmed, UCHealth's chief legal officer, told reporters. "I don't think UCHealth is an outlier here. We're not an outlier in the number, and we're not an outlier in the way to go about this."

Yes, but: Other Colorado hospitals don't sue patients to collect medical debt, and if they do, they file the lawsuits in their own names.

  • The nonprofit SCL Health stopped using litigation to collect unpaid bills when it merged with Intermountain Health in 2022. "This was done to better align with our mission," Intermountain spokeswoman Sara Quale said in a statement.

The bottom line: More than 100 million people in the U.S. are facing medical debts from the rising costs of health care, a KFF Health News report found.


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