Predatory Medical Billing In Texas

Report on Predatory Medical Billing In Texas Names 28 Hospitals And A Dallas Law Firm

By SAM BAKER, KERA News, JUN 1, 2020.

The May 27 report from a healthcare research and policy team at Johns Hopkins University found 28 hospitals (22 in the state) have sued patients in Texas for unpaid hospital bills since 2018. Some saw their personal accounts and property garnished. The Dallas-based DeLoney Law Group handled 83% of the suits.

The report studied 62 Texas counties between January 2018 and February 2020. Most hospitals in those areas did not sue patients to collect unpaid medical debt.

The hospitals that did sue (including Lake Granbury Medical Center and Medical City Weatherford, both in North Texas) recovered a combined total of nearly $18 million, but that was less than 1% (0.15% on average) of the hospitals’ total revenue.

“There’s not a lot of money in it,” said report co-author Dr. Marty Makary, a surgeon and a professor of health policy at the Johns Hopkins School of Public Health. He’s also the author of The Price We Pay: What Broke American Health Care — And How to Fix It.

What The Report Said About Texas Overall

The news by and large in Texas was good — 93% of Texas hospitals have never sued a single patient. So there are many role model hospitals in terms of going down a certain path to try to get collections, but not actually suing low income patients to try to put a lien on their home or garnish a bank account. Which is actually the extreme form of what we call predatory billing in medicine, and that occurred at about 7% of Texas hospitals.

The Hospitals That Chose To Sue

Sometimes it was a for-profit hospitals. Some are nonprofit, which pay no taxes on hundreds of millions of dollars in revenue because they have a criteria that they claim they have met with the IRS to be tax exempt because of community benefit. We’ve argued on the advocacy side of our work that you can’t have it both ways. You can’t choose not to pay taxes and then argue you have to shake poor people down in court to garnish paychecks or put liens on their homes. It’s one or the other.

Dallas-Based DeLoney Law Group That Handled The Suits

So they go to hospitals and say, ‘Hey, we’re gonna “help” collect your bad debt.’ Sounds like a good cause — but actually what they’re doing is terrorizing low income folks in court. The people are getting served papers at home, don’t understand these court documents that they get. Some of these folks are not savvy with the legal process. They don’t know their rights.

The DeLoney Law Group did not respond to KERA’s request for a comment. Chris DeLoney told the Texas Tribune: “We don’t comment on any matters that may relate to any of our clients.”

Hospital CEOs

I often call and tell them what our research discovered. Many of the CEOs and senior executives have no idea their own hospital is suing patients in court, using court orders to get routing numbers and account numbers from individual bank accounts of patients that can’t afford their bills, and to pull the money right out of their bank account or put liens on their car. So I think if we appeal to the best in people, we realized that we all went into healthcare to help people and this sort of represents the ultimate violation of the doctor-patient trust. Most hospitals have stopped when we brought this to their attention and we’re doing this nationwide and things are changing.

Don’t Hospitals Have The Right To Collect Unpaid Debt?

The issue is how far do you go? Number one, if you are a nonprofit institution that claims community benefit as a way to avoid millions of dollars in taxes, that’s point number one. Point number two, the patients are begging for a price. Sometimes they get the bill and they’re just begging for help to figure out if they have to pay or if this is supposed to go to insurance. People are lost in this blame game between collections and the law firm, the insurance company and the hospital billing department, and people are frustrated.

The interview was edited for clarity.

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