Mercy Healthcare Sacramento Leads Sacramento Not-for-Profit Hospitals in Bill Collection Court Cases
Mercy Healthcare Sacramento, a unit of Catholic Healthcare West that owns four not-for-profit facilities in Sacramento County, is the "most aggressive local hospital chain when it comes to collecting unpaid bills from the poor and uninsured," according to a two-month Sacramento Bee investigation. Reporters from the Bee reviewed more than 500 Sacramento Superior Court records in their investigation and conducted interviews with "dozens of patients, hospital and collections executives and consumer advocates," the Bee reports. The reporters found that although the Mercy facilities receive the "financial perks" that come with their not-for-profit designation -- including federal, state and county tax exemptions -- they filed four times as many bill collections lawsuits as other hospitals and sought 11 times more in total payments from patients than any other health care system operating in the area, the Bee reports.
During the first half of 2004, Mercy sued 202 patients to collect more than $1.7 million in unpaid bills ranging from $150 to nearly $1 million. When the Bee ranked individual local hospitals by the number of court cases filed during that time period, the four Mercy hospitals held the top four spots. The Bee also found that during FY 2003, which ended June 30, 2003, Mercy spent $4.8 million on charity care -- about 0.5% of its revenue, the lowest share reported among area hospitals. By comparison, UC-Davis offered the greatest amount of charity as a proportion of revenue, at 1.3%.
Several patients told the Bee that they "wanted to pay their bills but found it impossible to work out reasonable payment plans" with the collection agencies that have contracts with the Mercy hospitals. Some completed applications for Medi-Cal or hospital charity programs but were still sued, and others qualified for hospital assistance but were sued by the physicians who treated them. Even though hospitals use collection agencies, "ultimately, the hospitals call the shots" because they "give the agencies marching orders" on how flexible payment plans should be, and they must approve plans to file lawsuits or to employ the "most aggressive collection tactics," such as wage garnishment and asset seizure, according to the Bee.
David Amos, the CHW executive who oversees patient financial services, said, "Our mission is to provide care to everybody in the community who needs it. To do that, we have to be paid."
In response to "mounting criticism of hospital billing by lawyers and lawmakers," Mercy and several other area hospitals have revised their charity care polices, the Bee reports. In April, CHW implemented a systemwide policy that bans the use of collections, wage garnishment and property liens against "low-income, uninsured patients cooperating in good-faith efforts to settle their bills." However, since the policy change, Mercy's legal actions have increased. According to the Bee, 50% of the cases Mercy brought to court in the first six months of 2004 were filed in May and June (Evans/Rapaport, Sacramento Bee, 9/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.