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Analysis

Verma Knocks Nonprofit Hospitals for Suing Patients

By Steven Porter  
   September 10, 2019

The legal tactics employed by hospitals are partly to blame for the rise of 'radical socialist ideas like Medicare for All,' the CMS administrator said.

After a slew of cringeworthy headlines about the payment-seeking legal actions healthcare providers have taken against their patients, Centers for Medicare & Medicaid Services Administrator Seema Verma criticized nonprofit hospitals Tuesday for employing such aggressive tactics.

Verma made the comments during a speech before a regional policy board meeting of the American Hospital Association, which represents nearly 5,000 provider organizations. And she linked the rise of so-called "Medicare-for-All" proposals to the public's rising awareness of how far certain nonprofit hospitals will go to squeeze the full list price from uninsured patients. 

"These hospitals are referring patients to debt collectors, garnishing wages, placing liens on property, and even suing patients into bankruptcy," Verma said in her prepared remarks.

"This is unacceptable," she said. "Hospitals must be paid for their work, but it's actions like these that have led to calls for a complete Washington takeover of the entire healthcare system."

"The American people are demanding affordability, quality, and convenience, and the status quo isn't delivering," she added. "Radical socialist ideas like Medicare-for-All and the public option have lurked in the background of public policy for years. But their newfound prominence isn't based on their policy merits—it's because the status quo has failed to deliver."

Verma's comments come after a series of reports by major news outlets on how hospitals have pursued payment from their patients. The Wall Street Journal's Stephanie Armour reported in June on how nonprofit Mary Washington Hospital in Fredericksburg, Virginia, pursued an uninsured gardener over a $15,000 bill. The article cited a study of Virginia hospitals published in the Journal of the American Medical Association that found nonprofit hospitals were more likely than for-profits to garnish patients' wages.

Working with ProPublica, MLK50's Wendi C. Thomas wrote in June about the legal tactics of Methodist Le Bonheur Healthcare in Memphis, Tennessee. The Oklahoman published an article in August by Trevor Brown about the more than 22,000 lawsuits filed since 2016 by dozens of hospitals in Oklahoma against their former patients over unpaid bills. One hospital in New Mexico, Carlsbad Medical Center, made news for the thousands of lawsuits it has filed in the past four years, as Laura Beil reported in September for The New York Times. And the latest story came Monday in The Washington Post, with Jay Hancock and Elizabeth Lucas covering the financial disaster that struck a family after the University of Virginia Health System sued a couple and put a lien on their home over an emergency surgery bill. (That piece was also produced in coordination with ProPublica.)

The best path forward, Verma said, is to foster competition in the U.S. healthcare system by promoting price and quality transparency—echoing some of the sentiments she expressed in a recent interview with HealthLeaders about her approach to healthcare leadership

Related: 'UVA Has Ruined Us': Health System Sues Thousands of Patients, Seizing Paychecks and Claiming Homes

Related: Seema Verma's American Dream: Empower Consumers, Unleash Competition

“Hospitals must be paid for their work, but it's actions like these that have led to calls for a complete Washington takeover of the entire healthcare system.”

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Several major news outlets have published stories this summer critical of nonprofit hospitals' debt collection efforts.

Rather than expanding government-run healthcare, the CMS administrator advocates for competition through greater transparency.

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