Wall Street Journal Examines Inequalities in Bill Collection for the Uninsured
The Wall Street Journal today examines hospitals' policies of collecting medical expenses from uninsured patients. Although hospitals have been "basking in their image as charitable care givers," many have found themselves "under a spotlight" when media reports and advocacy groups revealed that they charge uninsured patients far more for medical treatments than the rates they charge health plans. Some hospitals also "hound [uninsured] patients for payment," using collection agencies, liens and wage garnishing, the Journal reports. According to Rick Wade, a senior vice president for the American Hospital Association, a report by the Journal on collection practices of New Haven, Conn.-based Yale-New Haven Hospital served as a "wake-up call for hospitals around the country." He said, "You always watch the East Coast and West Coast as bellwethers for how health policy issues play out" (Lagnado, Wall Street Journal, 6/10). In March, the Journal profiled Quentin White, an uninsured Bridgeport, Conn., resident who owed the hospital about $38,000 in bills related to cancer treatment that his deceased wife received at the facility. White could not pay the bills, and attorneys for Yale-New Haven placed a lien on his house. In April, Yale-New Haven officials eliminated White's debt and began to examine collection practices at the hospital (American Health Line, 5/12).
Two states -- California and Connecticut -- have introduced bills that would regulate hospitals' collection practices for the uninsured, the Journal reports. The Connecticut bill (SB 568), introduced by state Sen. Martin Looney (D) and approved by the Legislature, would reduce the 10% interest rate that hospitals can charge on unpaid bills to 5%, the Journal reports. According to the Journal, the Connecticut measure says that hospital bills are different from other consumer debt -- such as bills for a car -- because most patients did not choose to incur them. Medical debt is the leading cause of personal bankruptcy, the Journal reports. Ken Roberts, a spokesperson for the Connecticut Hospital Association, said that many hospitals have concerns that the Connecticut bill would not allow them to meet their obligation of billing patients and then collecting from them, which he said is required by Medicare and Medicaid, the Journal reports. The California legislation (AB 232), introduced by state Assembly member Wilma Chan (D) and approved by the Assembly, would cap hospital charges at the rates billed to Medicare, Medicaid and the state's workers' compensation program for uninsured families who have annual incomes of up to 400% of the federal poverty level and uninsured individuals or couples who have annual incomes of up to 500% of the poverty level. The bill also would give discounts on hospital care to uninsured people with incomes up to 700% of the poverty level who are unable to obtain private health coverage because of pre-existing conditions. The bill also would require hospitals to wait six months before giving unpaid bills over to a collection agency. Jan Emerson, a spokesperson for the California Healthcare Association, said that collection practices should be changed but that the California bill is "onerous and excessive," the Journal reports (Wall Street Journal, 6/10).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.