Abusive Billing Collections And Questionable Charity Care Plague Many Hospitals

By Consumers For Quality Care, on February 12, 2020

Hospitals across the country are increasingly coming under scrutiny for predatory billing practices. According to a report by Kaiser Health News, there is also lack of guidelines from  hospital trade groups when it comes to collections and providing “community benefits,” leaving  many to hospitals adopt wildly different and sometimes abusive policies.

This year, American Hospital Association board chairman Gragnolati’s Atlantic Health System, in northern New Jersey, sued patients for unpaid bills more than 8,000 times, court records show.

Among the families that Atlantic Health sued were Robert and Tricia Mechan of Maywood, N.J. The Mechan’s four children are all living with cystic fibrosis, a chronic lung condition. Tricia works two jobs to attempt to pay off their debt. Atlantic Health has sued the family for $7,982 in unpaid bills.

“I have bill collectors call me all the time,” Tricia Mechan said. “You’re asking me for more, and all I’m doing is trying to get the best care for my children. I didn’t ask to have sick children.”

She closed a savings account and borrowed money to settle Jonathan’s bill for $6,000. Another son with cystic fibrosis, Matthew, owes Atlantic Health $4,200 and is paying it off at $25 a month, she said.

One advocacy group called the National Consumer Law Center has urged that states, as well as the AHA, adopt certain standards for charity care at large medical facilities in order to curb predatory hospital practices.

The AHA should consider similar changes in its own guidelines, NCLC attorney Jenifer Bosco said.

“I would be interested in seeing them taking a more active role in creating some standard for hospitals about what’s too much,” she said. “What’s going too far? Given that this is a helping profession, what would be some appropriate industry standards?”

Currently, laws around charity care at nonprofit hospitals are vague and difficult to enforce. Nonprofit hospitals are required to provide a “community benefit” in return for the billions in tax breaks they receive every year. However, the rules on what qualifies as a “community benefit” vary by state. This is especially true when it comes to some of the most common “community benefits,” bill forgiveness and financial aid.

“There is no requirement” for minimum hospital charity under federal law, said Ge Bai a health policy professor at Johns Hopkins. “You design your own policy. And you can make it extremely hard to qualify.”

The law is also vague concerning collections. The IRS only requires hospitals to make “reasonable efforts” to determine if patients would qualify for assistance before attempting to collect debts.

“There could be a broader message coming out of hospital leadership” about harsh collections, said Erin Fuse Brown, a law professor at Georgia State University who studies hospital billing. “It seems unconscionable if they are claiming to serve the community and then saddling patients with these financial obligations that are ruinous.”