Colorado’s Largest Hospital System Utilizes Third-Party Agencies to Carry Out Predatory Debt Collection Practices

By Consumers for Quality Care, on March 6, 2024

Colorado’s Largest Hospital System Utilizes Third-Party Agencies to Carry Out Predatory Debt Collection Practices

A 9News/Colorado Sun investigation done in collaboration with the Colorado News Collaborative and KFF Health News found that for the last four years, UCHealth, Colorado’s largest nonprofit hospital system, has utilized a network of debt collection agencies to sue consumers over outstanding medical expenses, a practice that is considered predatory.

Medical debt incurred from an emergency visit for chest pains forced Cathy Woods-Sullivan to pawn her cherished wedding ring from her late husband. Burdened by the stress of debt collectors harassing her, she gave up the most precious possession she owned. “It was beautiful, beautiful,” Woods-Sullivan said of her ring. “But I had to do what I had to do. I was tired of getting the runaround. It was all I had.”

Woods-Sullivan settled her debt, which amounted to just over $1,600, to a nonprofit health care system that reported $839 million in profits last year.

This investigation not only found that UCHealth filed 15,710 lawsuits from 2019 to 2023, but also found that they did so by imploring debt collection agencies to harass consumers, acting as a buffer between UCHealth and their patients. “They are essentially deliberately using those third-party collection agencies to obscure the fact that they are the ones suing the patients,” said Adam Fox, Deputy Director of the Colorado Consumer Health Initiative. “It makes it really hard for the patient to untangle.”

Woods-Sullivan was recently hurt in a car crash, but refused medical treatment for fear of going back into medical debt. “I’m scared to go to the hospital,” she said. “I’m scared of the debt and to go back through what I’ve been through. I never want to ever feel that way, ever again.”

Per year, UCHealth is able to collect approximately $5 million from these lawsuits, or 0.07% of their net patient revenue. This amount is nominal for such a large health system, but detrimental, financially and emotionally, for the thousands of consumers negatively affected by these practices.

CQC urges nonprofit hospitals to hold up their end of the bargain to better serve their communities and deliver care for patients when they need it most. Furthermore, CQC urges lawmakers and regulators to take action to put an end to predatory medical debt collection tactics that harm consumers and exacerbate the medical debt crisis.