Patient billing may have gone too far!
by Tiffany Ferguson, LMSW, CMAC, ACM
Published on Jun 21, 2021
$71 million in sought out collections.
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Last week Johns Hopkins University released an interesting report to Axios that highlighted the top 100 US hospitals that have accrued revenue by suing patients over unpaid medical bills between January 2018 to July 2020. Now, there are many hospital rankings across the country, but this is not a top 100 list that your hospital would want to be on.
The findings in the report suggested some interesting buzz around the top 10 hospitals which accounted for 97% of the lawsuits against patients during that time. The leading hospital is Virginia Commonwealth University (VCU) Medical Center in Richmond Virginia who was responsible for 17, 806 of the 38, 965 court actions against patients for unpaid medical bills. Number two was University Hospital, also in Virginia at 7, 107 and third was Froedtert Hospital in Wisconsin at 3, 278 cases against patients. It should be noted that all three of these hospitals have reportedly stopped filing litigations against patients since this report was made public, however a lot of damage has already been done in the form of about $71 million in sought out collections.
We understand that patients across the country suffer from covering their medical expenses, in fact medical debt impacts about 58% of all debt collections, causing many Americans to file for bankruptcy. It is painful to hear this report considering that many Americans do not plan for medical emergencies and that since the pandemic so many people have been differing care and stressed with financial hardships related to lose of employment and health insurance. The last thing people want is a notice of legal action for unpaid medical bills. The report highlighted that these hospitals displayed some strong tactics to recoup funds for services which included emergency and unplanned surgeries by garnishing people’s wages and putting liens against properties and assets.
Also concerning is that many non-profit health systems made the list, such as University Hospital in Virginia and University of Kansas Hospital in Kansas City who also receive tax exemption to ensure they are providing charity care for their communities. Non-profits are obligated under the Affordable Care Act to have a financial assistance policy that specifically prevents hospitals from engaging in this type of behavior. Section 9—7(2) of the Patient Protection and Affordable Care Act (PPACA) states that all non-profits must have a ‘widely available’ financial assistance program for all members to screen eligibility. Non-profits must include transparency regarding their policies for the basis of how charges are calculated and must make reasonable efforts for patient collections and financial assistance qualifications prior to engaging in any extraordinary collection actions. Without digging into all the lawsuits, this report highlights extreme concern that the non-profits on this list may have violated the ACA requirements for non-profit status.
The report reminds us that it may be a good time to relook at your Financial Assistance Policy and ensure you are following appropriate guidelines according to the ACA, particularly if your institution is a non-profit. Remember that financial assistance policies, including a written debt collection policy must exist for any non-profit hospital and must be applied to all emergency and medically necessary care in the hospital facility regardless of admission status.
Johns Hopkins and Axios are hopeful that by providing greater transparency with this publication improvements can be made across health systems regarding approaches to predatory billing practices.