Which hospitals are suing patients? Investigation reveals hospital billing practices

We’ve been following stories over the past few years of hospitals taking egregious actions to recoup medical bills, such as suing patients, garnishing wages, taking their tax refunds, and sending patients to debt collections. Some of these hospitals even made it on the Shkreli Awards, our annual list of the worst examples of profiteering and dysfunction in healthcare.

While these billing practices are widespread, it’s hard to know exactly how many hospitals or which ones have engaged in them. As of now, there isn’t a national database of hospital billing practices or lawsuits, making it difficult for patients to know if they are at risk of financial harm.

However, a recent analysis by Kaiser Health News as part of their “Diagnosis Debt” campaign provides a step forward in transparency on this issue. Their team spent a year investigating billing and financial aid at a sample of 528 hospitals across the country. Among the hospitals sampled, they found that more than two-thirds sue patients or take other legal action against them. The majority of hospitals also allow for the hospital to report patients with outstanding bills to credit rating agencies. A smaller number (about 25%) sell patients’ debts to debt collectors and about 20% deny nonemergency care to people with outstanding debt.

More than two-thirds of hospitals in the sample sue patients or take other legal action against them.

Among hospitals that with egregious billing actions are some of the largest and most prestigious hospitals in America. Twelve of the 20 hospitals on the US News honor roll have the practice of reporting patients to credit bureaus, selling patient debt, suing patients for medical debt, or denying emergency care to patients with debt—including powerhouses like the Mayo Clinic, Cedars-Sinai Medical Center, and New York-Presbyterian Hospital. Many of these hospitals are part of health systems with large fair share deficits, according to the Lown Institute. However, other prestigious hospitals including Houston Methodist, Johns Hopkins Hospital, Stanford, and UCSF do not allow any of these billing practices, indicating that continuing egregious billing practices is a policy choice.

It’s unconscionable that so many hospitals (especially nonprofits) are suing patients for medical debt, sending debt to collections, or refusing to treat patients with medical debt. While it should be standard across the nation, it’s worth noting that some hospitals that are already taking a stand and not allowing these practices. Among the top hospitals on the Lown Index, several stand out for not engaging in any of the harmful billing practices measured by Kaiser Health News.

Hospitals leading on social responsibility

The Lown Institute Hospitals Index is the first to measure hospital social responsibility using 50+ metrics across health equity, value, and outcomes. The hospitals below all received A grades in Social Responsibility on the Lown Index and have policies disallowing egregious billing practices according to Kaiser Health News’ investigation.

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