Patient Medical Debt Lawsuits Decline After Hospitals Called Out

August 31, 2021 - Media exposure, public awareness, and patient advocacy led to fewer patient medical debt lawsuits in Virginia, a recent study published in JAMA suggests.

The study follows a popular 2019 analysis published in the same journal that found over a third of Virginia hospitals filed an aggregate of 20,054 warrant in debt lawsuits and 9,232 wage garnishment cases over unpaid patient medical debt. The analysis indicated that the hospitals “pursued patients for inflated medical charges in court and garnished paychecks from US residents with low income.”

The 2019 analysis garnered the nation’s attention, being cited by 82 different news stories. Since then, there have been numerous stories published detailing what journalists and researchers have called aggressive and predatory hospital billing practices.

Researchers from the 2019 analysis reconvened to determine how media exposure and newfound public awareness of the patient medical debt lawsuits impacted hospital billing practices in Virginia.

Using court records from 2018 through 2020, researchers found that the number of patient medical debt lawsuits filed by Virginia hospitals declined by 59 percent. More specifically, there was a 55 percent decrease in warrant in debt cases and a 66 percent decrease in wage garnishments.

Additionally, the total amount at stake declined from over $38.7 million prior to the 2019 analysis to $13.9 million during the post-analysis period. This equated to a 64 percent decrease in the dollar amount pursued in court, researchers stated.

“The data from the research article in conjunction with the media coverage brought a problem to light that few people were aware existed, enabling people to advocate for affected individuals. The negative attention brought by the media, coupled with individual patient testimonies, may have resulted in the decreased number of lawsuits in the postintervention period,” they wrote in the study.

Researchers pointed out that 11 hospitals that had filed lawsuits according to the previous analysis stopped doing so when the analysis was picked back up years later. Notably, Mary Washington Healthcare pledged to stop suing patients over unpaid medical debt following the 2019 analysis. The hospital carried through with its promise, filing just one lawsuit from 2018 through 2020, according to the study.

“Our findings indicate that hospitals can respond to public awareness that is data driven,” researchers wrote. “The combination of research, media coverage, and patient advocacy resulted in a statewide decrease of warrant in debt and wage garnishment lawsuits filed against patients.”

They also cited similar pledges hospitals and health systems in other states where hospitals faced similar scrutiny over their billing practices.

Still, many hospitals in Virginia continued to file lawsuits against patients over medical debt even after the media exposure. The study found that those hospitals tended to have lower mean annual net revenue ($255.5 million per hospital) than hospitals that stopped suing patients ($285.5 million per hospital).

Of the 56 hospitals that continued to sue patients during the period, 71 percent were non-profit organizations, 27 percent were for-profit organizations, and one was government owned. In comparison, 73 percent of hospitals that stopped suing patients were non-profit, 18 percent for-profit, and 9 percent government owned.

Researchers also highlighted the inconsistency associated with the non-profit mission and the act of suing patients over medical debt.