Houston Matters

Should Non-Profit Hospitals Be Able to Sue Patients Over Unpaid Bills?

Last month, U.S. Senator Chuck Grassley told NPR and ProPublica he was “astounded” by the collection practices of some non-profit hospitals, who are seizing wages of low-income patients. NPR and ProPublica have found hundreds of such instances, which Grassley, the Senate Judiciary Committee Chairman, says could be illegal. They would be, for sure, here in […]

Last month, U.S. Senator Chuck Grassley told NPR and ProPublica he was “astounded” by the collection practices of some non-profit hospitals, who are seizing wages of low-income patients. NPR and ProPublica have found hundreds of such instances, which Grassley, the Senate Judiciary Committee Chairman, says could be illegal.

They would be, for sure, here in Texas, where hospitals aren’t allowed to garnish wages. That doesn’t mean, however, that they can’t sue patients, a practice that does occur in Greater Houston.

A 2013 Houston Press review found the practice has been going on since 1999, and that one area non-profit hospital filed suit against more than 90 patients during that time for unpaid medical bills. While many of those lawsuits were ultimately dismissed, the Houston Press profiled one extreme case from 2012, in which an uninsured patient was billed for more than $400,000.

We learn more about the circumstances under which a non-profit hospital may be inclined to sue a patient. We talk with Dianna Wray of the Houston Press about her reporting, and with ProPublica’s Paul Kiel about his newsroom’s joint project with NPR. Then, we learn how these lawsuits tend to play out in court, as we talk with Tariq Gladney, a staff attorney with Lone Star Legal Aid, who has represented several low-income patients sued by hospitals, and University of Houston Law Professor Patricia Gray, who directs research at the UH Law Center’s Health and Law Policy Institute.

STATEMENT FROM MEMORIAL HERMANN:

“Memorial Hermann has a long history of providing millions of dollars in charity care to people in the Greater Houston region regardless of their ability to pay. In fiscal year 2014, Memorial Hermann provided more than $500 million in uncompensated care as well as other community benefits such as school-based clinics and mobile dental vans, to assist indigent and uninsured people in this region.

Memorial Hermann cared for more than 1.7 million patients in fiscal year 2014. As a safety net hospital in the region, we have a significant responsibility to be good stewards of the revenue that patient care generates to continue to provide care to the indigent, uninsured and under-insured in our community. That means billing for services rendered and collecting payment on such services from those who have resources to pay for their care.

Memorial Hermann offers a generous Financial Assistance Policy for all uninsured patients who apply and qualify for the program. Federal and State law governing non-profit healthcare facilities provide that anyone under 200% of the Federal Poverty Level (FPL) is eligible for financial assistance.  Memorial Hermann’s policy allows for patients under 400% of the FPL to qualify for financial assistance, which is above and beyond what is required by law.  Patients at or below 200% of the Federal Poverty Level will receive free care.  For patients who are at 201% to 400% of the FPL, Memorial Hermann offers a discount at least as much as the average discount offered to Medicare and managed care plans.

Seeking relief through the court system is rare and the recourse of last resort for Memorial Hermann. We only take such legal action after reasonable efforts have been exhausted to determine whether patients qualify for financial assistance, and multiple attempts are made to collect a debt from individuals who appear to have resources to pay, but fail to do so.” 

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