(Adds Upper Chesapeake Health response beginning in sixth paragraph.)
Nick Mostris had hoped to buy his parents’ home, situated on the outskirts of Baltimore County, from his brothers after their mother died in 2019.
Yet an almost 30-year-old hospital bill accrued by his father, who died in 2007 after a long battle with brain cancer, put that dream out of reach.
Mostris, a stagehand who still lives in the area, and his brothers discovered a lien on the property stemming from almost $26,000 owed to Fallston General Hospital, now part of University of Maryland Upper Chesapeake Health. That debt, originally about $6,000, ballooned because of court fees and interest accumulated over 19 years of legal battles between lawyers with the hospital and the Mostris family, state court records show.
To settle the debt, the brothers sold their childhood home, Mostris said.
“My mother worked her whole life to pay off medical debts,” Mostris said. “This was the only one left. My dad stayed at that hospital for literally three days.”
Lyle Sheldon, president and CEO of UM Upper Chesapeake Health, said the hospital doesn’t pursue liens, and Fallston had different practices.
“We actively work with our patients to help them pay outstanding bills, with fairness and empathy,” Sheldon said. The hospital didn’t explain why the Mostrises were still receiving letters about the debt through 2019.
Aggressive, and often confusing, debt collection practices by hospitals are catching the attention of policymakers, who say there are no easy solutions to protecting patients and their families from years of legal battles over medical bills.
Hospital groups say they offer financial assistance to low-income patients and turn to lawsuits only as a last resort to collect debts and avoid racking up uncompensated care.
Millions of Americans over the past year have lost their jobs and their employer-sponsored insurance, leaving them vulnerable to racking up debt in a medical emergency.
That economic effect lingers: a Kaiser Family Foundation poll published Wednesday reported 37% of adults said they or someone in their household had trouble paying for household bills, medical bills, or some basic expenses in the past three months. Among those polled, 16% said they were having problems paying medical bills over the past three months.
The Senate is considering a Covid-19 relief package that includes an expansion of the Affordable Care Act’s insurance subsidies, a move Democrats say will help Americans avoid going into medical debt. That change would last only two years and wouldn’t help anyone currently in debt.
Five Senate Democrats, led by Chris Van Hollen (D-Md.), introduced legislation in the last Congress to suspend wage garnishments and bank account seizures related to medical debt through the pandemic. The Senate never considered it, and it isn’t included in the Covid-19 relief package.
Some consumer advocates and researchers say they aren’t waiting for federal lawmakers to act. They’re trying to spur change at the state level, naming and shaming hospitals into changing their debt-collection practices, or shining a light on predatory health-care organization billing systems.
Lawmakers in six states have introduced bills to either restrict how hospitals collect unpaid debts or expand charity care. Only one, in Maryland, would directly limit when a hospital can sue its patients to collect a debt.
The bill Maryland’s state legislature is considering would ban hospitals from suing patients for debts below $1,000 and demand hospitals first offer income-based repayment plans for patients with outstanding debts before they take legal action.
Supporters say the move would help the most vulnerable, such as people already struggling with other debts.
“These are people who don’t qualify for financial assistance but they can’t pay a $600 bill, at least not all at once,” Marceline White, executive director of the Maryland Consumer Rights Coalition, an advocacy group backing the legislation, said. “They just need their hospital to work with them.”
In almost all these states, and at the federal level, hospital groups are pushing back on the proposed changes.
Preventing hospitals from suing patients for debts below $1,000 could mean hospitals have to charge more for other services, Jennifer Witten, vice president for government affairs for the Maryland Hospital Association, warned state lawmakers during a February hearing to debate the legislation.
Maryland has the nation’s only rate-setting regulation system. The organization that sets the rate for hospital services adjusts those rates based on the amount of uncompensated care, or services that go unpaid, each year, Witten said.
She said hospitals turn to lawsuits as a “last resort” when they can’t otherwise collect on a debt.
“Hospitals have every incentive to get people into payment plans or onto Medicaid,” Witten said.
The proposed changes, White said, would cost each hospital in Maryland about $7,000 per year on average.
Hospitals are influential in Maryland. The state hospital association spent more than $435,000 on lobbying last year, state records show. Johns Hopkins, the largest hospital system in the state, spent almost $580,000 lobbying last year. MedStar Health, a large nonprofit health system, spent $335,000 on lobbying last year.
Suing Over Billing
An attorney in Ohio responded to what he saw as unfair hospital billing practices by suing two of the largest health-care providers in his state: the Cleveland Clinic and University Hospitals.
Dan Myers alleges in a lawsuit against University Hospitals that they double billed him after he got imaging services and later sent a debt collector after him for charges he already paid. He’s similarly claiming the Cleveland Clinic has failed to give proper receipts to patients and has a history of confusing billing practices.
Myers, who represents clients in debt collection, tenant rights, and wrongful termination cases, said he’s trying to prove that hospitals are subject to state consumer protection laws that require any business to offer good faith estimates to their customers before they can rack up fees.
“Hospitals have been ignoring those rules in Ohio for decades,” Myers said. “You go to a mechanic in Ohio they have to do it and we know that. Hospitals just don’t.”
University Hospitals, in its court filings, denied Myers’s claims and said its billing records “speak for themselves.” The 18-hospital system has sought to dismiss the case.
Medical bills in general can be confusing even for savvy patients who are insured, Amy Hennen, director of advocacy for a service in Maryland that helps connect people facing collections with consumer attorneys, said. Many expect their insurer will foot the bill or end up getting separate bills from the doctor and the hospital where they were treated.
“There’s a lot of opportunity for confusion and it’s not easy to understand where some charges come from,” she said. “Part of that is just how the health system works.”
Naming and Shaming
Marty Makary has been researching and documenting hospital lawsuits against patients for years but only recently found a way to stop them: call journalists.
Makary, a surgeon at Johns Hopkins University, and other researchers documented 20,054 warrant-in-debt lawsuits filed by hospitals in Virginia in 2017, published in a 2019 study.
However, Makary said only when he partnered with journalists at ProPublica, NPR and other outlets did his work begin to have an impact. One hospital, Mary Washington Healthcare of Fredericksburg, Va., promised to stop suing its patients after NPR wrote about them. Another in Nashville, Tenn., changed its billing practices in response to reporting.
“We publish these findings in journals and other doctors see them,” Makary said. “Sometimes it’s the broader public we want to take notice.”
In 2017, Mary Washington was among the most litigious hospitals in Virginia, according to Makary’s research. By the end of 2019, the hospital had moved to suspend all of its debt-collecting lawsuits.
Makary said he’s seeing fewer lawsuits being filed in Virginia overall and believes it’s because of his work. He plans to publish a study later this year showing this trend.
To contact the reporter on this story: Alex Ruoff in Washington at firstname.lastname@example.org