Wall Street Journal Examines Practices Used by Hospitals To Collect Debts
Two articles in Thursday's Wall Street Journal look at tactics that some U.S. hospitals employ to collect patient debts. The following are summaries:
- "Hospitals Try Extreme Measures to Collect Their Overdue Debts": Some hospitals currently "rank among America's most aggressive debt-collectors" as they put increasing pressure on low-income and uninsured people to pay their overdue health care bills, the Journal reports. Hospitals typically charge the uninsured higher rates than they charge private insurers and government agencies, which can negotiate discounted prices. To get patients to pay, a few hospitals employ a practice known as body attachment or civil arrest warrants -- "one of the harshest and least-known collections tactics of all" -- in which they seek the arrest of debtors who miss court hearings, the Journal reports. According to the Journal, this practice is "so extreme" that many of the country's largest commercial creditors do not use it, and collections lawyers in many regions say it has been "all but abandoned." U.S. medical centers have come under scrutiny for their billing and collections policies; in June, the American Hospital Association issued a memo that urged its 4,800 members to review their practices and demand that their collections agencies "treat ... patients with dignity and respect." Congress has also begun an investigation into hospitals' practice of charging the uninsured more than they charge insured patients. While patient advocates say that medical debt should be treated differently than other types of debt, hospitals say that because of "soaring" health care costs and reimbursement cuts from the government and insurers, they need to "recoup every dollar they can." Howard Peters, the senior vice president of the Illinois Hospital Association, said, "You can't solve the issue of millions of uninsured by simply turning to hospitals whose financial conditions are quite fragile and say, 'You do it'" (Lagnado, Wall Street Journal, 10/30).
- "How a Local Agency Challenged Hospitals' Collection Tactics": In an accompanying article, the Journal profiled the actions of the Illinois-based Champaign County Board of Review, which challenged the use of body attachments by not-for-profit health care providers Carle Foundation and Provena Covenant, the Journal reports. After reviewing summaries of hundreds of collection law suits Carle filed from 1998 to 2001, the board recommended that the institution have its property tax exemption taken away on grounds that "it wasn't truly charitable," the Journal reports. The board's request was denied by the state five months later in March 2003. Currently, the board is focused on a similar challenge to Provena. Mark Wiener, Provena's chief executive, said that Provena is now offering more and deeper reductions on low-income patients' bills. He said of the board's review, "I welcome the questioning and the review in terms of making sure we meet the definition of a nonprofit hospital" (Lagnado, Wall Street Journal, 10/30).