Consumers Feel The Impact Of Medical Debt

By Consumers For Quality Care, on September 11, 2019

Consumers Feel The Impact Of Medical Debt

Joclyn Krevat was sitting at her computer in 2011 when she received a new LinkedIn request. Krevat recognized the name but was nonetheless baffled by the request. The woman who had sent it, Karen Pollack, was the head of the debt-collection practice KP Recovery Solutions and had been trying to collect from Krevat, The Atlantic reports.

In December 2009, Krevat thought she was coming down with the flu. Instead, she was diagnosed with a severe heart inflammatory disease called giant cell myocarditis. Krevat spent seven weeks on life support before undergoing a heart transplant.

A handful of the doctors that treated Krevat ended up being out-of-network. Krevat, who works as an occupational therapist in New York, points out that she could not determine if the doctors performing her heart transplant were in-network because she was unconscious at the time. Despite having good insurance through her husband’s job as a teacher, she estimates she received around $50,000 in medical bills.

To Krevat, the LinkedIn request was almost funny, in the laugh-till-you-cry sense. She remembers thinking, Is this lady stalking me or does she really think we’d be good in each others’ professional networks? “It was just more evidence that I was in this bizarro world of receiving bills I shouldn’t be responsible for,” Krevat told me.

While Pollack’s LinkedIn request is an extreme example of debt collectors pursuing unpaid bills, hospitals and collections agencies have recently come under increased scrutiny for their aggressive efforts collecting on consumers’ debts.

Consumers for Quality Care has previously highlighted hospitals in Maryland, Tennessee, and Virginia that have garnered national attention for their efforts to recoup consumers’ debts. Like the others, Carlsbad Medical Center, in Carlsbad, New Mexico, has engaged in aggressive debt collection practices, according to
The New York Times
. The Times found that Carlsbad Medical Center has filed nearly 3,000 lawsuits over consumers’ medical debts since 2015, more than 500 of which were filed in between January and August 2019.

Carlsbad Hospital has received criticism for their high prices in the past. A 2014 investigation found that Community Health Systems, a chain of hospitals that includes Carlsbad Medical Center, operated three of the hospitals charging the highest prices in the state. Due to a lack of competition, medical prices are often higher in one-hospital towns, like Carlsbad, than they are elsewhere.

In a presentation to the state legislature in 2015, the mining company Intrepid Potash, a major
employer in Carlsbad, calculated that it would be cheaper for one of its workers to travel to Hawaii for a gall bladder operation — including airfare for two, and a seven-day island cruise — than to get the procedure at the local hospital.

Medical debt is an increasing issue nationwide. According to the Consumer Credit Protection Bureau, more than half of consumers that were reported to credit bureaus in 2018 were reported due to medical debt. Craig Antico, a medical debt expert and former debt collector, used data from an ADP report to estimate that 1.5 percent of Americans have had their wages garnished due to a medical reason.

Yet another survey reported that a third of insured women battling breast cancer had bills sent to collectors; seventy-seven of the women who did not have health insurance had bills sent.

People confronted with medical debt typically drain their savings, the Commonwealth Fund has found, and 43 percent said it lowered their credit rating, suggesting that many of these consumers were reported to collections agencies.

When the suits Carlsbad Hospital brings come to court, many of the defendants fail to show. When they do appear, they often admit to the debt and ask to set up a payment plan or say they cannot afford to pay the bills, according to District Judge Lisa Riley.

The experience of dealing with medical debt can be traumatic for consumers, according to John Hopkins University surgeon and health care cost expert Dr. Marty Markary. Many of the consumers that receive suits, wage garnishing and liens due to medical debt are low-paid workers already fighting to make ends meet, with little savings.

“These are hardworking Americans who did nothing wrong,” he said.