As America’s Governors Gather in Our Nation’s Capital, CQC Urges Them to Address Predatory Hospital Practices

By Consumers For Quality Care, on February 7, 2020

As America’s Governors Gather in Our Nation’s Capital, CQC Urges Them to Address Predatory Hospital Practices

WASHINGTON – As governors from across the United States come together in our nation’s capital for the National Governors Association (NGA) Winter Meeting, Consumers for Quality Care (CQC) issued an open letter today, urging them to address the mounting issue of hospitals inflicting predatory practices on their constituents.

“In recent months, we’ve seen a rise in predatory practices from hospitals in the form of outrageous surprise bills, wage garnishment, lawsuits, and costs for treatment that are both unpredictable and financially crippling for too many patients.” the Consumers for Quality Care board wrote.

“US hospitals are abusing vulnerable patients through financially toxic billing practices, despite a majority of these hospitals having nonprofit status. The nonprofit designation frees hospitals from paying most taxes and allows them to float tax-exempt bonds. In return, they are supposed to provide community benefits including free or discounted care for patients who can’t afford to pay.”

The letter highlights specific practices hospitals are employing that routinely place economic burden on Americans across the country and outlines how governors can address these devastating practices by implementing statewide regulations to protect their residents.

“Now is the time to put policies in place to ensure your constituents are able to seek hospital care without fear of financial ruin,” wrote the board members.

CQC is a coalition of advocates and former policy makers working to partner with health advocacy organizations and provide a voice for patients in the health care debate as they demand better care. CQC’s #HospitalFail campaign spotlights predatory hospital tactics against consumers and provides them with resources to advocate for themselves in case this happens to them or others.

Below is the full text of the open letter.

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Dear Governors:

During this time when you and your colleagues gather to discuss crucial issues faced by your states, Consumers for Quality Care (CQC), wants to raise the mounting issue of hospitals inflicting predatory practices on your constituents. This is an issue you have the power to address.

The people in your states rely on hospitals as a place to turn to when sick, critically injured, oftentimes scared and desperately seeking treatment for urgent medical issues. It is because of this that we find it particularly outrageous that the very institutions that we turn to in times of need, are inflicting irreparable financial harm on the very people they serve. In recent months, we’ve seen a rise in predatory practices from hospitals in the form of outrageous surprise bills, wage garnishment, lawsuits, and costs for treatment that are both unpredictable and financially crippling for too many patients. This profit seeking behavior is not right and it certainly doesn’t improve community health.

Medical debt harms tens of millions of consumers; nearly 1 in 6 Americans report having been contacted by a debt collector over a health care bill within the last year and medical debt impacts communities of color at disproportionate rates. Worse, medical debt is forcing many families into bankruptcy. Fifty-nine percent of filers cite medical debt as a contributor to their bankruptcy.

Furthermore, US hospitals are abusing vulnerable patients through financially toxic billing practices, despite a majority of these hospitals having nonprofit status. The nonprofit designation frees hospitals from paying most taxes and allows them to float tax-exempt bonds. In return, they are supposed to provide community benefits including free or discounted care for patients who can’t afford to pay.

Unfortunately, there is little being done to prevent this systemic abuse and protect your constituents. Large regulatory and advocacy-driven bodies have been mostly hands-off regarding this issue and nationally, there is no federal standard or guidelines to which hospitals must adhere. Because of this, health systems are continuously suing patients – even those who might qualify for assistance – for unpaid bills, which sometimes lead to home foreclosures, wage garnishments and more. Most laws don’t substantially limit harsh collections, requiring only that nonprofit hospitals make a “reasonable effort” to determine whether consumers qualify for charity care or financial assistance prior to pursuing a lawsuit, garnishing wages or putting liens on homes. Patients in need deserve to know about the community benefits or charity care for which they may qualify, and evidence suggests even this minimal threshold often isn’t met.

Because of the lack of federal regulations or industry standards, you and your staff have the opportunity to act and implement state-wide regulations that protect your residents. We are calling on you to enact changes, such as:

  • Enacting laws that protect your state’s most vulnerable from abusive hospital practices, such as pursuing lawsuits against patients, garnishing wages and placing liens on homes;
  • Strengthening financial assistance policies at a state-level, ensuring that people can visit a hospital when they need care without fear of falling into irreparable debt; and
  • Enacting state-wide standards and ceilings for common abusive practices like high interest rates on medical bills, reporting on medical debts prior to insurance determinations and pursuing lawsuits when a patient is, or should be, eligible for free or discounted care.

Now is the time to put policies in place to ensure your constituents are able to seek hospital care without fear of financial ruin.

Consumers for Quality Care Board of Directors

Donna Christensen, M.D.

Jim Manley

Jason Resendez

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