After a respite in the first year or two of the COVID-19 pandemic, some health care providers in Wisconsin have resumed suing patients who defaulted on their bills, according to a new report, which forces providers and medical groups to do too little to do so. Avoid the problem and help them.
“Medical debt litigation incites unrepresented patients to a coordinated medical debt collection industry,” States The Reportproduced by ABC Health, an advocacy group and nonprofit law firm that connects patients and families with programs to help them afford health care.
In the first year or two of the COVID-19 pandemic, some hospitals and health care groups stopped referring patients to court when they didn’t pay their bills, according to the report, titled “Debt and Medical Collections in Wisconsin–Restarting the Collection Machine”.
The report notes that “the slowdown in clusters by some providers was good news for patients in Wisconsin, but as our analysis indicated, some systems were poised to start cluster activity after public scrutiny and press inquiries subsided.”
The report says that providers who have resumed this practice begin to do so anywhere from late 2021 to early 2022. In addition, policies issued by the federal government or voluntarily implemented by some providers during the pandemic are expected to expire soon. The hardship of financially distressed patients may be prevented.
The report states that “while the impact of the COVID-19 pandemic continues to be felt by Wisconsin families, ongoing collection actions are increasing stress and harming the communities that medical providers serve.” “Medical debt claims by medical providers should be a rare exception and not a common tactic against people who can’t afford their medical bills.”
Bobby Peterson, executive director and public interest attorney for ABC for Health, said the report also takes an initial look at how some providers are transferring their debt to a third-party company that is suing patients rather than the health care provider doing so, Peterson said in an interview.
He added that even if they are not prosecuted, patients in debt may face other problems.
“Just because you don’t get taken to court doesn’t mean providers don’t get in touch with you,” Peterson said. He noted that medical debt can damage an individual’s credit rating, even though the Federal Consumer Financial Protection Bureau has taken charge of that. Medical debt collection as an issue. In response, credit reporting agencies have begun to change the way they treat some medical debt in credit reporting.
Peterson said providers should expand their financial assistance plans to be available to anyone regardless of their insurance coverage. Some plans consider anyone with insurance ineligible, he said, “even if it’s bad insurance.”
The report notes that the IRS requires nonprofit hospitals to make “reasonable efforts” to determine if a patient qualifies for financial assistance before billing collections or going to court to compel the patient to pay.
But in client representation, ABC for Health found that “not all hospitals appear to be fully complying with these IRS requirements,” the report states. “The ABC has identified cases in which certain hospitals extend the definition of ‘reasonable effort’ to determine eligibility, often simply providing a patient with an application as part of a host of other forms, or even simply directing the patient to their website.”
The problem is further complicated by ambiguity about the accuracy or applicability of the various hospital fees.
According to the report, current hospital rules allow a patient to be referred to groups while a request for assistance is being processed under the hospital’s assistance program. As a result, “the mere threat of collection can easily scare low-income patients into paying debts they don’t owe” because the debts will be covered by the assistance program.
Peterson said the complexity of billing as well as the assistance programs themselves can be daunting for patients. “They are trapped in this kind of electronic debtor’s prison, where it can be a very miserable place.”
The report includes more than a dozen recommendations for hospitals and other healthcare providers for indebted patients. Among these, it urges providers to:
- Refer patients to community advocates who can help them.
- Provide “clear and unambiguous eligibility criteria” for hospital financial assistance programs, removing application deadlines and geographic restrictions.
- Tell patients about financial assistance policiesWhenever they express concerns about their ability to pay, even if the patient has already received an order. Hospital encounters are stressful situations, and patients may not fully process prior notices, especially while they are being taken.”
- Process financial assistance requests promptly and be flexible in the documents required for patients to check their eligibility.
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Originally published at San Jose News Bulletin
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