VA Hospital Under Scrutiny For Suing, Garnishing Wages Of Consumers

By Consumers For Quality Care, on July 8, 2019

VA Hospital Under Scrutiny For Suing, Garnishing Wages Of Consumers

Daisha Smith, a 24-year-old night shift worker at a home for the elderly, was sued by Mary Washington hospital, where she was hospitalized for two weeks in 2017 while uninsured, NPR reports. Smith says she was not even aware she had an unpaid medical bill until the hospital began garnishing her wages.

Smith was not alone. On the day of her court appearance, 300 people had been summoned for cases related to Mary Washington Hospital. Carlos Ortiz, a gardener without health insurance, was sued by the hospital as well. Ortiz owed roughly $15,000 after he underwent testing at the hospital due to dizziness, which was diagnosed as an inner-ear issue, according to The Wall Street Journal.

The patients “were coming one by one in front of the judge,” said Mr. Ortiz, 65, of Locust Grove, Va. “It was sad to see how many people were going through this.”

The hospital is an outlier in how many patients it sues, but it is not alone. Thirty-six percent of hospitals in Virginia sued patients and garnished wages in 2017, according to a new study. The study, published in JAMA, found that five hospitals in the country accounted for half of all patient lawsuits. Four of those five hospitals are non-profits, like Mary Washington.

The study found that the average amount garnished from wages in Virginia was just under $2,800. Lisa Henry, communications director for Mary Washington’s health care system, says that the hospital only received .21 percent of its $624 million revenue in 2018 through wage garnishments.

While Mary Washington says that it sues patients as a last resort and to get consumers “to engage,” the practice has raised eyebrows, especially given the facility’s status as a non-profit.

“Hospitals were built — mostly by churches — to be a safe haven for people regardless of one’s race, creed or ability to pay. Hospitals have a nonprofit status — most of them — for a reason,” says Martin Makary, one of the JAMA study’s authors and a surgeon and researcher at Johns Hopkins Medicine. “They’re supposed to be community institutions.”

Lauren Bosco, a staff attorney at the National Consumer Law Center, says that regulations around non-profit hospitals bar “extraordinary collection actions” without first attempting to asses a consumer’s eligibility for financial assistance. However, the mechanisms of what that eligibility looks like, and what constitutes “extraordinary actions,” are left to the hospitals to determine.

“Hospitals sometimes can legally sue their patients for medical debts,” Bosco says. “The question is whether that’s something that they should be doing.”

For Makary, the answer to that question is clear. He calls the practice “aggressive, and even predatory,” and “a disgrace every place where it happens.”

The “hospital docket” at the Fredericksburg court illustrates how far hospitals will go to pursue debts, he says: “It’s almost as if the courthouse has converted into a taxpayer-funded collections agency.”

Erin Fuse Brown, a law professor who focuses on health care costs, sees fundamental issues with the practice as well.

“There has to be a balance between getting their bills paid but also being a reasonable community member,” she says. Regarding lawsuits, she adds: “It doesn’t seem to be worth the effort, and it’s so ruinous to the patient — not just the financial obligation but the effect on your credit, on your record, the emotional effect of being sued.”

Smith understands these impacts profoundly. The hospital sued her for roughly $12,300 in unpaid bills from her stay. She says no one told her that an uninsured patient making under $25,000 would in fact qualify for “free care” under the hospital’s policy.

“When I looked at my pay stub, I’m like, ‘Why do I only have like $600-something in my account?’ ” She noticed “garnish” written on the bottom of her pay stub. “So I called my company and asked them, ‘Who’s garnishing my check?’ ” They told her it was Mary Washington.

With the reduction, Smith is only taking home about $1,400 a month. Her rent alone is $1,055. She says the reduced income has left her without groceries in her house. Smith says she is also aware of multiple people in her orbit, including a relative and co-worker who have also been sued. Even though she is now enrolled in Medicaid, she says if she needs medical help again, she is going to stay far away from Mary Washington Hospital.

“And that’s crazy,” she says, shaking her head. To Mary Washington Hospital, she says: “People need help. You all are just money hungry.”

Luckily for consumers, like Smith and Ortiz, after the story was published and on the hospital’s practices came to light,  it announced it would suspend the practice and re-evaluate the program.