On a single day last month in Washington County, 41 civil lawsuits were filed on behalf of Glens Falls Hospital in an attempt to collect on past-due bills. The next day in Saratoga County, 19 cases were filed.
In the lawsuits, brought in state Supreme Court, the hospital claimed close to $300,000 in unpaid bills. The amounts sought from former patients ranged from $525 to $22,000, with many falling between $2,000 and $5,000. Some of the bills date back several years.
Glens Falls Hospital is not alone in turning to the legal system for help: Saratoga, Ellis, St. Peter’s, Samaritan and Albany Medical Center hospitals have filed similar lawsuits over the past few months.
In a ripple effect from the Great Recession, hospitals are seeing a rise in so-called uncompensated care, defined by the American Hospital Association as the combination of bad debt — bills that patients can’t or won’t pay — and charity care: services to the poorest for which repayment is not expected.
The AHA reported in January that between 2007 and 2010, uncompensated care at hospitals nationwide rose by $5 billion, to $39.3 billion, or nearly 6 percent of total expenses. Thirty years ago, uncompensated care was just $3.9 billion.
Locally, a spokesman for the Healthcare Association of New York State said costs due to uncompensated care “have grown steadily throughout the recession” at Capital Region hospitals, rising from $54.8 million in 2008 (based on 2006 data) to $78.4 million this year (based on 2010 data).
It’s easy to see the link between job losses in the recession and the higher level of uncompensated care.
The Commonwealth Fund, a foundation that supports research on health care issues, reported last year that nearly three-quarters of the people who lost their health insurance along with their jobs in the recession were struggling with medical bills and debts, compared with about half of those who lost jobs but not their insurance. And one advocate for low-income New Yorkers, in a study of patient financial-assistance programs at hospitals, cited medical debt as a key reason behind the majority of personal-bankruptcy filings.
Yet collections attempts at some hospitals have raised eyebrows. One major collector of medical debt, Chicago-based Accretive Health, was sued earlier this year by Minnesota’s attorney general for allegedly violating patient privacy laws with its aggressive tactics. Affidavits told of patients confronted by Accretive employees about past-due bills as they awaited care in emergency rooms.
In May, the American Hospital Association posted updated guidelines for members on billing and collection practices that noted a provision in the new Affordable Care Act that requires hospitals to make “reasonable efforts” to ensure patients aren’t eligible for financial assistance before “undertaking significant collections actions.”
At Glens Falls Hospital, “many efforts” are made to provide access to financial assistance for the uninsured and underinsured, said Steve Rinaldi, whose title is senior director for revenue cycle. Some may qualify for charity care; others may be directed to government programs such as Medicaid.
Accounts don’t go to collections — handled by an outside firm — until after 120 days, he said, and even then there may be another two months of letters and phone calls before a lawsuit is filed in an attempt to recoup the money owed.
“Often these obligations are written off as uncollectible,” he added, “and the hospital does not receive reimbursement for services provided.”
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily those of the newspaper. Reach her at firstname.lastname@example.org.