“There was a nearly 90% drop overall in legal actions between 2019 and the first seven months of 2020 by the nation’s largest hospitals and health systems,” according to a new report by Johns Hopkins University. The Johns Hopkins findings are part of an ongoing series of state and national reports that look at debt collections for unpaid bills by health systems in the two-year span from 2018 to 2020.
However, the researchers discovered at least 16 institutions that pursued lawsuits, wage garnishments, and liens against their patients in the first seven months of 2020. The report also indicated that more than 25% of the nation’s health systems pursued “nearly 39,000 legal actions seeking more than $72 million…More than 65% of the institutions identified were nonprofit corporations.” Froedtert Health, a Wisconsin health system, sought the most money from patients – more than $3 million.
The amount of medical debt individuals owe can “cause devastating financial burdens to working families,” the report said. The federal Consumer Financial Protection Bureau has estimated unpaid medical bills makes up 58% of all debt collections.
“The poor or uninsured often bear the brunt of such actions,” said Christi Walsh, clinical director of health care and research policy at Johns Hopkins University. “In times of crisis you start to see the huge disparities.”
Hospitals within the Froedtert Health system filed more than 100 cases from March through July, researchers noted, and nearly 100 were liens from unpaid bills. One lien was against Tyler Boll-Flaig, a 21-year-old uninsured pizza delivery driver, who was injured in June of last year when a drag racer smashed into his vehicle. His jaw shattered, as did four vertebrae in his spine and several ribs were broken. His 14-year-old brother, Dominic, was killed.
Brandy Flaig, the boys’ mother, received a call from a hospital billing office asking for Tyler’s contact information to set up a payment plans almost immediately. On July 30, Froedtert Hospital in Milwaukee filed a $67,225 lien against him. “It’s during the pandemic, we’re still grieving, and they go after Tyler?” Flaig said. “It’s predatory.”
Reedsburg Area Medical Center, a nonprofit in Reedsburg, Wisconsin, filed “139 lawsuits and 22 wage garnishments” in spring and summer of last year, according to the report. Advocate Aurora Health, another nonprofit, and the top-suing health network in the state before the pandemic, dropped to zero filings after February 2020.
“During the first wave of the COVID-19 pandemic, most hospitals substantially reduced or even ceased all medical debt lawsuits. However, as the pandemic’s first wave subsided, many…hospitals resumed business as usual,” the study indicated.
Rich Miller, executive vice president of Northwell Health, said he was” skeptical of its findings, in part because the health system stopped all legal action against patients from April through September of last year.” Miller added that Northwell “does not take legal action against Medicaid patients, those over 65, the unemployed, people with disabilities or military members.”
As families continue to struggle amid the pandemic, however, many are still job less or just starting to rebuild financially. Getting caught up in a legal case with a medical facility can severely limit any progress made during an already difficult time.