How America’s top hospitals hound patients with predatory billing
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Medical debt comprises 58% of all debt collections in the U.S. and has caused hundreds of thousands of Americans to file for bankruptcy. Some of the top 100 hospitals are huge contributors to the problem: Between January 2018 and July 2020, they filed tens of thousands of lawsuits and other court actions against patients. A handful of hospitals cut lawsuits in 2020, due to policy changes, but it’s unclear if these will last. According to JHU’s data, these patient lawsuits are most prevalent among governmental and nonprofit hospitals.
Why it matters: Nonprofit hospitals enjoy tax exemptions in exchange for charitable measures, but our analysis shows that most of these hospitals have failing grades on the Lown Institute Charity Care Rating, meaning they’re not meeting their obligations.
Furthermore, the Affordable Care Act requires nonprofit hospitals to have a financial assistance policy, and prevents hospitals from engaging in “extraordinary debt collection” unless they’ve made reasonable efforts to figure out whether a patient is covered by that policy. When nonprofits sue patients who can’t afford to pay, “if it’s not a violation of the letter of the Affordable Care Act law, it’s certainly a violation of the spirit of it,” said Marty Makary, a lead author of the project.
Most hospitals charge more for a procedure than what it costs them. The top 100 hospitals, on average, charged patients 7x the cost of service, with markup calculated from the American Hospital Directory’s cost-to-charge ratio. And private, for-profit hospitals average nearly a 12x markup. What they’re saying: Hospital industry officials dismiss marked-up list prices as merely a tactic they use to negotiate with insurers, which is partially true — charges are almost never the actual price paid by insurers, but they can be used for uninsured patients.
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July 19, 2021 at 11:21 AM #435780gordyflParticipant
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The collection agent would go around the room and have the patients sign papers promising they would pay. Most people were unaware it was a private collection agency. I think they might have stopped that practice after the bad publicity.
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