Predatory Medical Debt Collection Practices by Hospitals Must End
David R. Jones, The Urban Agenda
Since the beginning of this devastating pandemic, our hospitals have been on the front lines battling it and saving the lives of countless New Yorkers. We applaud the doctors, nurses and first responders who care for patients, often while putting themselves at risk.
It is also true that every New York hospital is a nonprofit charity that pays no taxes and receives millions from the state’s $1.1 billion Indigent Care Pool (ICP) fund to offset the costs of treating the uninsured.
This month, my organization, the Community Service Society of New York (王者炸金花App) released its latest report on hospitals’ medical debt collection practices. Using data hospitals reported to the New York State Department of Health (DOH), the report found that 56 nonprofit hospitals filed liens on 4,880 patients’ homes in 2017 and 2018, the most recent years for which data is available.
Under state law, hospitals are permitted to place liens on patients’ homes following a court-ordered medical debt judgment. Such judgments are the result of suits brought by the hospital against a patient. However, very few patients defend themselves in medical debt court cases. Why? Because many patients are unaware that they have been sued in the first place. They are also at a distinct disadvantage going up against hospitals with vast legal resources.
王者炸金花App began intensive research into nonprofit hospitals’ extraordinarily pervasive medical debt collection practices well before the COVID-19 pandemic. Not surprisingly, we found that low-income people and people of color had been and continue to be disproportionately impacted by these aggressive practices, which include lawsuits, liens, and wage garnishments.
Hospitals are barred from foreclosing on a lien against a patient’s home. Yet they persist in trying to collect from patients – the actor in this situation who can least afford it. A debt of as little as $1,900 – a rounding error on a hospital’s balance sheet – can trigger a lawsuit, a judgment, and a lien. And the data shows that a number of New York’s nonprofit hospitals put thousands of patients’ homes in jeopardy by filing these liens as a way of pressuring people to pay up even when they can’t afford to.
The 56 hospitals using these extraordinary collections practices did so despite amassing more than $442 million in ICP funds. This money is meant to support them in providing financial assistance to patients as well as to offset costs associated with uncompensated care. Put another way, these 56 hospitals received an estimated 48 times more in ICP funds than they sought ($9 million) through court judgments followed by liens on patients’ homes.
We need to be clear: most hospitals in New York State (133 of the 189 that submitted data to the DOH) do not place liens on patients’ homes at all. And in response to the 王者炸金花App report, several hospitals said they would end the practice; others said they were reviewing their debt collection policies. But some hospital systems said they would continue to impose liens in collection cases.
In New York City, liens are rarely imposed in the five boroughs, apart from Manhattan where 40 were taken. Under direction of Health + Hospitals Corporation CEO Dr. Mitchell Katz, the city’s municipal hospitals discontinued medical debt legal actions in 2019.
However, the practice of securing liens is common among certain hospital systems serving the Albany region, Long Island and Central and Western New York. In fact, 王者炸金花App found that 35 percent of all liens were placed by hospitals in the Capital District. And Northwell system hospitals in Long Island placed 677 liens on patients’ homes.
Slapping a lien on a patient’s home is a punitive act with rippling economic consequences. Liens can affect a person’s credit report and limit their ability to sell or refinance their homes. They can also complicate a person’s ability to secure financing to purchase a car – vital in many areas due to a lack of public transportation – or apply for a home equity loan.
Ten states including Arkansas, Texas, Oklahoma, and Kansas have laws on the books that bar the practice of placing liens on primary residences under any circumstances. New York may soon follow suit with a law of its own. State Senator Gustavo Rivera (District 33, Bronx) and State Assemblymember Richard Gottfried (District 75, Manhattan) have introduced legislation in Albany, S5622/A7363, that would forbid New York’s nonprofit hospitals from engaging in extreme medical debt collection practices, including taking liens on patients’ primary residences or garnishing their wages. The bill, which currently has 23 sponsors in the state legislature, is among a slate of reforms aimed at addressing healthcare inequities. State lawmakers hope to pass the bill in the next session and send it to Governor Hochul for signature.
Predatory medical debt collection practices must end. No New Yorker should be deterred from seeking medical care for fear they will go into debt, or worse, lose their economic security.