Nonprofit Hospitals Suing Poor Patients Without Telling Them They Qualify For Reduced Or Free Care

Given that nonprofit hospitals are tax-exempt, the general view is that their primary focus should be on providing care for those who need it rather than making using the court system to make those patients pay up. Almost all of these hospitals have programs to reduce bills for people living below or near the poverty line, but some are suing poor patients without ever telling them about these options.

A 2015 report from the University of Michigan’s Institute for Healthcare Policy & Innovation found that while 94% of nonprofit hospitals had some sort of policy for uninsured and underinsured, only 42% were doing anything to notify patients of these options before attempting to collect a medical debt.

Making matters worse for the patients, more than 7 out of 10 nonprofit hospitals charge uninsured and underinsured patients more than the discounted rates given to Medicare or insurance companies. So not only are these hospitals not telling their poorest patients that they can pay less (or sometimes nothing at all), they are suing these people in an attempt to collect more than the hospital would receive from a multibillion-dollar insurance company.

Some nonprofit hospitals are filing huge numbers of debt-collection lawsuits for bills that could be lower if the patients were advised of the policies.

ProPublica reports that Deaconess Hospital in Evansville, IN, filed an average of more than 4,000 lawsuits a year between 2010 and 2015, in spite of the fact that it offered programs that provided free care to anyone living below the federal poverty line ($11,880/year for an individual; $24,300/year for a family of four), and discounted care to patients whose annual income is within three times the federal poverty line.

One attorney who represents low-income clients in the area tells ProPublica she’s seen many defendants who clearly qualified for the free or discounted care but who were sued nonetheless. She acknowledges that the hospital has been cooperative when presented with these cases, but these are people who should have been told they were eligible for the lower rates without having to involve the court system.

The hospital now says it is revising its policies to be more proactive “to ensure that financial options are explored from the beginning.”

Additionally, Deaconess is making its assistance program more generous by expanding free care to patients within two times the poverty line.