Hospitals rip patients with draconian debt collection and costly parking fees

chslogo-300x55Big hospitals and health systems  seem to have a knack for kicking patients when they’re already down, as recent news stories suggest, reporting on how they gouge the sick and injured in ways small  (parking fees that add up) and big (draconian medical-debt collection campaigns).

How do the suits that run hospitals come up with these cruel assaults on the folks they claim are their institutions’ No. 1 concern?

To its credit, CNN dug into the gnarly legal approach taken by Community Health Systems, Inc., one of America’s largest hospital chains, toward its medical debtors during the worst of the already crushing coronavirus pandemic.

The system, with 84 hospitals concentrated in the South and stretching from Alaska to Key West, Fla., “filed at least 19,000 lawsuits against their patients over allegedly unpaid medical bills since March 2020, even as other hospitals around the country have moved to curtail similar lawsuits during the coronavirus pandemic,” a CNN investigation found. The number of cases, the investigators said, likely is under-estimated.

The Nashville-based chain sued patients for as little as $201 and as much as $162,000, with many of those in debt defaulting in court cases decided when much of the country was shut down by public health measures keeping people at home. That did not stop Community Health from suing its patients, as well as adding to their grief with piled on charges for attorney fees and interest on sums owed, CNN found.

At a time when tens of millions of Americans lost work due to the pandemic, the hospital chain also moved quickly to garnish wages and to take other harsh steps to recover sums owed on medical bills.

Caitlin Donovan, spokeswoman for the National Patient Advocate Foundation, a patients’ rights group, assailed the aggressive medical debt collection practices, telling CNN:

“I can’t think of a worse thing a hospital system can be doing than suing patients for medical bills during a pandemic and a recession.”

The hospital chain, in the meantime, reported one of its most profitable years in recent times — with net income exceeding $500 million — notably because it also received hundreds of millions of dollars in taxpayer assistance under federal coronavirus relief programs.

Community Health defended its aggressive debt-collection efforts, saying it offers extensive charitable care and works with the poor, working poor, and those who are unemployed to ensure they get a fair shake on sums owed. As CNN reported:

“’Legal action is always the last resort,’ the company said [in a statement to the network]. CHS hospitals only file lawsuits, it said, ‘after it is determined the patient appears to have some ability to pay based on credit record and employment status or if the patient has been non-responsive’ following repeated attempts to discuss their bill. The company said its hospitals do not ‘initiate litigation against any patient we know lost his or her job because of the pandemic,’ and that under a new policy it adopted earlier this year, it would withdraw lawsuits against anyone making less than 200% of the federal poverty level — $25,760 for an individual. But many patients failed to fill out a form outlining their finances that could make them eligible for those reprieves or other aid, it said.”

But critics point out that the company, which has a history of zealous pursuit of medical debt that did not ease during the pandemic, can be unresponsive to discussions about billing, even with patients with legal counsel. Many of those sued already had weak finances, meaning they lacked health insurance (and were charged the highest rates, as a result), or they were hit with high deductibles and co-pays. And as reporters found:

“In most states, the lawsuits by the health care giant are a well-oiled machine. Local lawyers file claims for bills, including an affidavit from a hospital custodian of records. In many cases, the defendants never respond to the complaint or hire a lawyer, and CHS files for a default judgment against the defendant, which they are typically granted. Other cases see the hospital dismiss the lawsuit in exchange for defendants agreeing to a payment plan.”

Experts have noted that hospitals and health systems, for all their aggressive efforts, rarely collect enough from medical debts to justify the costs of pursuing the sums. In fact, financial institutions routinely bundle the uncollected debt and sell it for pennies on the dollar, allowing Good Samaritans to pay of huge amounts of it for relatively small amounts.

Criticism of the excesses in this practice has shamed other institutions nationwide, notably two giant health systems in Virginia (those of the University of Virginia and Virginia Commonwealth University), to roll back their crushing collection campaigns.

Cancer patients hit with expensive parking fees

If hospitals don’t look sufficiently mean-spirited with their debt-collection practices, how grim are their decisions to flay cancer patients with ever-mounting parking fees, which they are charged with for their relentless rounds of treatments at big hospitals? As the independent, nonpartisan Kaiser Health News Service reported:

“For cancer patients, the road from diagnosis to survivorship feels like a never-ending parade of medical appointments: surgeries, bloodwork, chemotherapy, radiation treatments, scans. The routine is time-consuming and costly. So, when hospitals charge patients double-digit parking fees, patients often leave the garage demoralized.”

The KHN story focused on patients and charges in Chicago, where rates can vary from a few dollars if patients can get in and out of appointments in less than half an hour up to $28 for a day’s parking. Patients, of course, cannot predict how long their care may take, with chemotherapy potentially lasting for enough time that they get charged the max rate. Those in care also cannot predict how their condition after tests or treatments, making it difficult to know if they could save money, say, by taking public transportation or ride-share services.

As a component of cancer care, parking costs would not seem major. But over the course of successful therapy, it can add up to hundreds of dollars — sums that financially strapped cancer patients can ill afford. As the KHN article reported, quoting Dr. Fumiko Chino, a radiation oncologist at Memorial Sloan Kettering Cancer Center in New York who studies the “financial toxicity” of cancer treatment, including costs not covered by insurance, such as parking fees:

“[R]esearchers calculated the cost to park at 63 National Cancer Institute-designated cancer centers while receiving the standard number of treatments for each of three types of cancers: node-positive breast cancer, head and neck cancers, and acute myeloid leukemia, or AML. They did not calculate costs for follow-up appointments, blood draws, routine scans, and immune-boosting injections. They found that, while 20 of the hospitals provided free parking for all cancer patients, the other 43 had widely varying fees. ‘The range was $0 to $800 for breast cancer,’ Chino said. ‘That’s huge, and it’s not like the person who’s paying $800 is necessarily getting any better treatment.’ The maximum charges for a standard course of therapy for head and neck cancer were $665 and for AML, $1,680. Practices should change, Chino said, ‘to alleviate this strain for our patients’ … The top daily parking rate, according to the researchers, is $40 at New York’s Mount Sinai Hospital. (A spokesperson for Mount Sinai declined to comment.) Chino’s own institution, Memorial Sloan Kettering, is not far behind; parking at one of its main garages begins at $12 an hour and maxes out at $36 a day. Of the 63 hospitals, including those where parking is free for cancer patients, 54% offered free parking for chemotherapy and 68% for radiation treatment.”

Three cancer experts wrote in an editorial in a specialists’ medical journal last year, KHN reported, that:

“’It seems ethically incorrect to nickel-and-dime patients for parking charges’ … They acknowledge that most top cancer hospitals are in urban centers, where parking costs are often high and third-party agencies may operate the garages. ‘Nevertheless, in 2020, with our multibillion-dollar cancer center budgets, we as health care systems should do everything we can to help patients and caregivers,’ the editorial said.”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent health care. This has become an ordeal due to the skyrocketing cost, complexity, and uncertainty of treatments and prescription medications, too many of which turn out to be dangerous drugs.

As patient advocates look to ways to slash at bankrupting health care costs, they have put hospitals squarely in their sights, as these institutions have become a major driver of spending, taking up roughly 1 of every 3 dollars spent in this area (~$1.2 trillion in 2018 alone).

Sure, hospitals and the people in them need to make a reasonable return. But grinding down patients and their families by grubbing mercilessly for every penny is a poor way for any enterprise to treat its customers. We have a lot of work to do to ensure that our hospitals and health systems provide safe, excellent, and compassionate care in an accessible and affordable fashion — and that they do not become onerous money machines that seek to drain ill and injured patients of their hope and finances.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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