Debt-collection suits pit law firms against ill-informed patients

Nearly one-third of the 132,000 lawsuits that Maryland hospitals have filed against patients in the past five years over unpaid bills have been filed in the city District Court. Lawyers call up debtors to work out payment plans in rapid, on-the-spot settlements, or lawyers might haggle with debtors in the courthouse hallways. When cases go to judges, hospitals typically win after hearings that last a few minutes or less. These lawsuits have played out even though hospitals' costs of unpaid bills and provision of free care to the poor are supposed to be covered by the rates paid by all patients, under Maryland's unique rate-setting system. Some of the hospitals that have filed the most lawsuits have received millions of surplus dollars from the payment system.