Column | Medical Debt

It’s time to get lawsuits over medical debt out of the headlines

Column | Medical Debt

It’s time to get lawsuits over medical debt out of the headlines

Out-of-network bills aren’t the only billing-related surprise encountered by healthcare consumers these days.

For some consumers, lawsuits over unpaid bills are another unwelcome surprise. Media accounts detail cases where consumers are sued without warning. (It is not clear, however, whether these individuals had been active partners in seeking solutions for resolving the debt.) The parties sued often have little or no ability to pay. 

The targets of lawsuits aren’t the only ones who are surprised. Journalists discover variations in hospitals’ propensity to sue that they struggle to explain. I imagine some journalists are also surprised that they become de facto patient advocates, intervening to persuade hospitals to reduce or waive outstanding bills and change their policies. Years ago, healthcare executives talked about the prospect of finding reporters from 60 Minutes on their doorstep. Now, the unexpected media visitors may represent any number of news outlets. Medical debt resolution by the media has become “a thing.” For example, former Vox reporter Sarah Kliff, now a well- respected health reporter for The New York Times, wrote a series of articles that led to the cancellation of more than $60,000 in medical debt. In 2016, the comedian John Oliver set up a company that purchased and forgave nearly $15 million in medical debt from more than 9,000 people.

Desperate measures signify that people believe these are desperate times. When journalists intervene on an individual level, it usually means communication between provider and consumer has broken down and the relationship is irreparable. When celebrities intervene on a group level, constructive problem solving is typically not part of the process. In both scenarios, the resulting publicity has negative ripple effects that reverberate online indefinitely. 

This must not become the new normal. Following HFMA’s industry consensus best practices for medical debt resolution will help providers get on the right track. The best practices specify that patients should be notified before a lawsuit is filed and they should be informed of the time frame for such actions early in the collection process. A lawsuit should never come as a surprise. The best practices also call for hospital and health system boards to review and approve an organizational policy on acceptable collection practices and stipulate that business affiliates, such as debt collectors, should adhere to that policy. If your organization already has such a policy, make it a priority to revisit it to make sure it reflects the current needs of your community and is being followed by business affiliates. Communicate the policy clearly on your website and through other channels, such as newsletters. Do these things before the media come calling. 

Also, realize that upstream actions matter. If a hospital follows HFMA best practices related to patient financial communication, the number of cases where lawsuits are even considered will be minimized. 

Consumers expect better of their hospitals. Let’s do our best to live up to — and exceed — their expectations. 

About the Author

Joseph J. Fifer, FHFMA, CPA,

is president and CEO, HFMA, Westchester, Ill.

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