hospital wristband

Thirteen of Clubs

Despite being nonprofits and receiving billions in subsidies, New York State hospitals went to court more than 30,000 times over the past five years to force patients to pay bills that many simply could not afford, a report released Thursday found.

The report by the Community Service Society of New York said hospitals failed to offer financial assistance to all those in need, employed aggressive debt collectors and enjoyed an unfair advantage in courtrooms.

CSS (a funder of City Limits) also found that a handful of hospitals were responsible for most of the suits, though hospitals disputed those findings.

The court clashes between patients and hospitals occurred against a backdrop of rising costs. From 2008 to 2016, premiums and deductibles rose from 5.5 percent of the average New Yorker’s household income to 7.7 percent—a significant jump during a period when hospital usage dropped and the federal Affordable Care Act became law.

A different kind of industry

CSS researchers looked at court cases filed from 2015 through 2019 by some 139 hospitals in 26 New York counties. It found just under 31,000 cases. The median overdue amount sought in the suits was $1,900—although, the report points out, that total can quickly grow since hospitals have six years to sue and can tack on 9 percent annual interest. Most times, the report said, patients didn’t even respond to the suits, resulting in default judgments.

Many industries use debt collectors and go to court sometimes to collect, but CSS argues the hospital industry is different.

New York State hospitals are non-profits that receive a tax exemption worth $2 billion a year. The state also funds hospitals for the uncompensated care they are obligated to provide low-income people. That Indigent Care Pool funding runs $1.13 billion a year.

And it’s not like healthcare consumers often have much choice in whether or where to seek care, or much ability to contest the murky assertions embedded in hospital bills. As the report notes:

Debt collection lawsuits allow hospitals to seize assets, garnish wages, freeze bank accounts, and place liens on the homes of patients who cannot pay for health care. Patients accrue hospital bills in times of serious illness and frequently without any ability to plan ahead or “shop” for the best deal. Often, patients have little medical expertise, billing proficiency, or insurance literacy. Nonetheless, when a nonprofit hospital sues a patient, the courts view that patient’s inability to pay as failure to honor a commercial contract. These medical debt court cases often ruin patients’ lives by wrecking their credit and threatening their economic security.

Elisabeth Benjamin, vice president of health initiatives at CSS, says the data indicate hospitals are taking more and more cases to court every year. One example: What is now known as NewYork-Presbyterian Lower Manhattan Hospital filed 189 collection suits from 1987 through 2014—a span of 27 years. In the six years since, it has filed 149.

“New York’s not-for-profit hospitals have more support from tax exemptions and ICP funding and other financing vehicles than any other hospital system in the country and we were shocked to see this amount of litigation. It’s so completely out of step with the compassionate care hospitals are supposed to provide,” she says. “We think hospitals should do some soul searching about whether this is what they ought to be doing.” The report is a call to action, she says, for a moratorium on hospital debt-collection litigation.

Disparities detected

Some New York counties see much higher rates of hospital debt litigation than others. In Fulton County, for instance, there are 54,000 people—and they were sued by hospitals 1,410 times. There is also evidence suggesting racial disparities in where collections tend to occur, according to the report.

A few hospitals file the majority of debt-collection lawsuits, the report contends. Three-quarters of the suits tracked by CSS were generated by four hospital systems. The most active, Northwell Health, was responsible for 51 percent of the lawsuits, according to CSS.

Northwell disputes that finding, contending that two of the hospitals the CSS considers part of Northwell—Crouse Health in Syracuse—and Maimonides Medical Center in Brooklyn—are merely affiliates and not owned by the company.

“CSS totally misrepresented the facts. There was no attempt to present this information fairly or honestly,” Terence Lynam, a spokesman for Northwell, told City Limits. “They have lost credibility issuing such a reckless report.”

Lynam says including those hospitals distorts the picture of Northwell’s approach, and that hospitals fully owned by Northwell have much lower rates of litigation. “Northwell Health does not file lawsuits on 99.9 percent of its patient bills. In the rare instances that Northwell Health takes legal action, it occurs only when a patient has been unresponsive to the multiple attempts made by Northwell Health to resolve the outstanding balance (including multiple offers for financial assistance, discounts, and counseling) and the patient has a strong ability to pay the outstanding balance.”

Crouse Health’s website prominently features the Northwell logo, although the interior of the site indicates the relationship between the companies is not a merger but is a multifaceted partnership.

The CSS report relates the story of one patient who was told to get an HIV test when his partner was raped. The patient contends he wanted to seek the test elsewhere but was told to get one in the hospital instead. It ended up costing him $1,000 when HIV tests are often free.

“Why is a hospital charging $1,000 for an HIV test?” Benjamin asks. “That’s just cruel. I feel the whole system is antiseptic. They have an antiseptic system that’s inhumane and drives people into debtors’ courthouses.”

2 thoughts on “Hospitals Hit for Debt-Collection Practices

  1. I have very good health insurance due to having cancer a couple of times; besides that, I’m in very good health. I went to a Northwell emergency room while on vacation with intestinal blockage include severe belly pain & cramping. As soon as I arrived in the ER I was given a shot for pain that immediately relaxed my belly and allowed me to pass gas and feel better. I was given an x-ray & CT scan to confirm the diagnosis and I thought I was done. Not!

    Somehow 2 surgeons descended on me both aggressively claiming they needed to do surgery immediately or I could die (1) from my intestinal blockage or (2) from a potentially cancerous tumor in my right ovary. I said, but my blockage feels gone, can you show me on a scan that it exists? And to the GYN surgeon, “I go to a highly-rated cancer center in Manhattan, I’ll go to my former oncologist there.” Both surgeons grumbled but did more scans, a cat scan, MRI, and vagina ultrasound and still could not find an intestinal blockage or ovarian tumor that I could see on any scan. I was like, anyone knows that the biggest cause of intestinal blockages is previous surgery, why would I let you “explore” surgically if I don’t feel bad anymore and you can’t show me a blockage? The blockage surgeon was shockingly angry and said I would just end up back in the ER and could even die! At that point I realized, this surgeon was not professional and probably paid on commission. The GYN surgeon gave me more tests and insisted I needed surgery there ASAP. I said, if you can’t show me a scan with a lump, and if I already go to a much better-rated cancer facility than that little seaside hospital, why would he even want to do my surgery there while on a short vacation?! He was furious! Shouted all the terrible things that would happen to me and stormed out of my room! At that point, I realized that Northwell Health, Southside Hospital (Bay Shore) was dangerous. I was sent upstairs to a room. For the next 2 days I kept asking what was my diagnosis was and when could I leave. I was told I could not leave until I could drink and pass water — and then not given a glass of water, or food, for 12 hours! Of course, I was thirsty and drinking water from the bathroom, but the nurse said, well, I can’t discharge you until the doctor gives me permission. The “doctor” supposedly said I couldn’t leave until I could eat soft food successfully — but it took 12 hours to get some jello! At that point, I was starving and dehydrated and started demanding to see an actual doctor and diagnosis for why I was still there. 12 hours later the nursing supervisor realized there wasn’t a reason I was there and said I could leave if I could handle lunch. Then the supervisor said the doctor said it was dinner (still saw no doctor). After getting dressed to leave and complaining bitterly she finally swore she would give me a discharge notice after I ate dinner, and did. Northwell is gangsta as hell, I will never go there again. Please investigate Northwell’s unprofessional ER doctors and their undoubtedly high rate of ER patients getting surgery, bizarrely unnecessary and unsubstantiated tests, and bullying surgeons.

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