Taxpayer-Funded Michigan Hospital Issues Hundreds Of Collections Lawsuits To Patients Already On Payment Plans

By Consumers For Quality Care, on August 11, 2021

According to The Traverse City Record Eagle, the Munson Medical Center in Traverse City, MI has filed hundreds of collections lawsuits against former patients without warning, despite many of them already actively being on a payment plan.

Since January of 2018, Munson’s financially toxic debt collection practices resulted in 361 judgments worth over $2.3 million – often collecting their debt by garnishing as much as 25 percent of the paychecks of their former patients. The hospital went so far as to sue patients who were crowdfunding online to help cover their medical debt.

“The thing is, these aren’t rich people who aren’t trying to pay their bills,” Christi Walsh, one of the study’s lead authors, told NPR. “I’ve been on the ground in the courthouses. These are people who don’t have the money to pay it.”

A growing number of nonprofit hospitals – like Munson – are targeting consumers with predatory practices like lawsuits and wage garnishments, despite receiving hundreds of millions of dollars in special tax breaks specifically to treat patients who can’t afford to pay. As of July 2021, a Journal of the American Medical Association study found Americans have more than $140 billion in standing medical debt.

CQC urges policymakers to rein in rising out-of-pocket health care costs and to hold hospitals accountable for outrageous debt collection practices that threaten to bankrupt consumers.