Medical Debt Collection Defense

Research shows that over a quarter of Americans have problems paying their medical bills. Among third-party debt collections, more than half are medical bills.

As medical debt attorneys, we’re keenly aware of the problems people face when it comes to paying their medical bills. We often hear emotional and stressful stories from people detailing how medical debt has impacted their family, their work, their ability to get credit, and their lives. 

The problem with this system is that it’s broken. Insurance companies, hospitals, doctors, and medical debt collectors all take part in a process that can end up costing people who need medical care thousands of dollars out of pocket. And worst of all, some people avoid treatment for fear of crushing medical bills.

According to a recent report titled Preying On Patients: Maryland’s Not-for-Profit Hospitals and Medical Debt Lawsuits, between 2009 and 2018:

  • Maryland hospitals — all of which are classified as not-for-profits — filed 145,746 medical debt lawsuits seeking $268.7 million from patients. 
  • Maryland hospitals had operating revenues of almost $147 billion and $5.68 billion in net income
  • At least 3,278 lawsuits ended with the patients filing for bankruptcy
  • The amount of medical debt sought in lawsuits as a percentage of operating revenues was 0.18% 
  • Medical debt sought as a percentage of net income was 4.7 percent. 

Those hospitals could have easily written off those medical debts with minimal effect on their bottom lines.

According to a 2019 study, Johns Hopkins Hospital medical debt lawsuits are characterized by:

A widespread use of hardball tactics such as wage and property garnishments and years’-long pursuit of patients just to collect a median amount of $1,089 of alleged medical debt per patient in neighborhoods close to the hospital.

At The Holland Law Firm, we’ve noticed a growing trend of consumers being sued over medical debt. Some common issues we’ve seen include:

Surprise medical billing

If you go to an in-network hospital, you assume that you are covered under your insurance. But an increasing number of Americans are receiving surprise medical bills for services performed in-network, but by an “out-of-network” provider. The “out-of-network” bill is usually for thousands of dollars more than the in-network rate, and the insurance company refuses to pay for it.  The statistics are stunning. One in five insured adults had a surprise medical bill in the past two years. This is a scam that is costing people untold dollars, stress and grief. Even the American Medical Association is concerned about this problem. 

“Charity Care” scams

Many hospitals are classified as “nonprofit” organizations under federal law, meaning they get certain credits and funds from the government. 

In exchange, hospitals are required to give a certain amount of “charity care” to some patients for free or lesser charges. Yet, time and again we hear reports that the hospitals are failing to meet their legal obligations. According to the Preying on Patients study:

Many of those who should be benefiting from charity care in Maryland are not. Rather, they are being sued. While the state’s not-for-profit hospitals have been filing tens of thousands of lawsuits against their patients who apparently could not afford to pay for needed medical care, those same hospitals have slashed the amount of charity care they provide by hundreds of millions…. Many of those sued would have qualified for charity care based on their income levels.

Overbilling

You get your medical bill in the mail… except you’re seeing charges that don’t align with what you thought you owed. 

Sometimes hospitals, doctors, and medical service companies will overbill you for “phantom” procedures, materials, or services that you either didn’t receive, were done by an out-of-network provider (after you were told you were covered), or were done without your knowledge.

No Freedom of Contract

One of the major issues with medical debt is that consumers (patients, in this case) don’t have the same rights or options as they do in other situations.  A debt from a medical emergency room is very different than any other kind of debt, because it was not voluntary; unlike shopping for a car or a new TV, you did not decide to get sick and then bargain for services.   

There is no freedom of contract, no bargaining power for the patients, and many are made to feel powerless in the face of large hospitals and insurance companies.

You don’t have any choice regarding the cost of service in an emergency situation. You could be unconscious, not close to another medical care option, or unable to make clear decisions while under duress. You don’t get to say, “yes I would like the surgery, but not the oxygen.”

You aren’t in control of the doctors sent in to do a procedure. You can only trust the hospital or doctor taking care of you or your loved one… and many times that trust is broken by the hospital or the insurance company in order to profit off of you.

Not only that, but the debts are often related to very personal medical conditions, stressful procedures, and emotional outcomes that amplify the stress and shame that comes along with being sued.

A Medical Debt Attorney Can Help You

At the end of the day, medical debt is different from other types of debt, and should be treated differently. Until that day comes, people will continue to get sued for medical debt and will continue to need lawyers who do collection defense.

Finding a trustworthy and experienced medical debt attorney can make all the difference. At The Holland Law Firm, we’re here to help, and we have years of experience helping people sued for medical debt.

Don’t give up. Give us a call.

Contact us today to set up a consultation & learn more about your options.

MEDICAL DEBT RESOURCES:

Should Medical Debt Be Treated Differently Than Other Debt?

I Just Found Out I Have a Judgment Against Me. What Can I Do?

For Nonprofit Hospitals Who Sue Patients, New Rules

How to check medical bills for errors, here.

List of 13 states that may not balance bill, with explanations, here.

If you are in New York, there is actually a website called Stop Surprise Medical Bills, here.

2014 study by the CFPB finding that medical debt overly penalizes consumer credit scores, here.

Senator Elizabeth Warren’s 2014 Medical Bankruptcy Fairness Act, here.

White paper from the National Patient Advocate Foundation on the impact of medical debt, here.

Elizabeth Warren’s 2007 study on “medical bankruptcy” finding that in 62.1% of all bankruptcies were “medical”, here.

Federal Trade Commission website about your rights regarding medical and other debt collection, here.

Consumer Financial Protection  Bureau info about debt collection and your rights, here.

Submit a complaint about debt collection to the CFPB, here.