Medical Debt and the Pandemic

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Brian Lehrer: It's the Brian Lehrer Show on WNYC. Good morning again everyone. One of the problems this pandemic has exposed is medical debt. Well, sometimes that debt can lead to lawsuits. Since March, more than 50 hospitals across New York State have sued a total of 5,000 patients for outstanding medical bills according to a story in The New York Times.

That reporting would not be possible without the work of an independent nonprofit organization, many of you know at the Community Service Society of New York, which focuses on the needs and policy priorities that would help poor New Yorkers for the most part. Which in this case has been investigating the medical debt collection practices of New York's largest nonprofit hospitals since the beginning of the pandemic. They've now published their findings in a brief called Discharged into Debt. One very notable finding is that a certain nonprofit hospital system with ties to Governor Cuomo, Northwell Health filed more than 1,400 lawsuits between March and November despite receiving more than a billion dollars in emergency funding through the stimulus package last spring.

Joining me now to make sense of this is someone involved, Elisabeth Benjamin, vice president of Health Initiatives at the Community Service Society and co-founder of the Health Care for all New York Campaign. Elisabeth, always great to have you. Congratulations on this work. Welcome back to WNYC.

Elisabeth Benjamin: Thank you, Brian. It's really wonderful to be here with you today.

Brian: What are these lawsuits look like and who are they targeting?

Elisabeth: These lawsuits are all brought by New York State hospitals that are charities. It is illegal for a hospital in New York state not to be a charity in fact, so I think what is unusual about this practice is that I can think of no other charitable enterprise that actually sues its constituencies. For example, Save the Children doesn't sue the children. The Humane Society doesn't sue the animals. It's just a very unusual practice that we have allowed as a society for hospitals to sue their patients.

These hospitals are suing their patient roughly for an average of $1,900. What you see is a lot of small claims court, robo-- Instead of robocalls, I would call these robo collection lawsuits. The people they're suing are usually working folks, sometimes unemployed folks, often unemployed folks. The lawsuits are often brought to a 9% interest. On a $1,500 bill that can be $500 in interest. I think there was a gentleman Mr. Catherine in The New York Times article that actually had an unusually large bill, $31,000. He was sued for $8,000 in interest on top of that $31,000 bill. He worked at a grocery store. These are not wealthy people that are being sued.

Then I think to add insult to injury when we look, once the hospital sue people, they can garnish your wages. When we review the wage garnishment data, we see that these workers are working at Walmart, TGIF, local county school district. These are not wealthy people being sued.

At the end of the day, really, I think what is so upsetting about the whole practice is that the hospital gets $1.2 billion every single year from the New York State Legislature to incentivize them to offer financial aid to their patients, and yet we noticed in every single one of these cases there's no expectation by these robo suer collection law firms that the hospitals use, that an offer of hospital financial aid was even brought to the patient.

Because in our state, every hospital design its own financial aid policy and even the state own auditors say that they can't keep them legal. It's just a mess. I think that's why we've really brought our attention to it because we as much of our consumer assistance programs have noticed the tremendous increase in the aggressive nature of hospitals pursuing patients that come to us for help with their insurance matters and their medical debt problems.

Brian: It isn't just Northwell Health, again about 50 hospitals in New York state have sued a total of 5,000 patients since March. Most of those hospitals are small and located upstate but there was a fair amount of attention to Northwell in The New York Times article based on your work. After your report made that news, Northwell said it would resend all the legal claims that had filed in 2020. Do you take that as an important-- Well, is it just a gesture? Is it meaningful? Does it solve the problem as far as Northwell is concerned? Give us your take on these new developments.

Elisabeth: Well, we were delighted to hear that they were pausing their litigation activity. We did meet with Northwell in March. We wrote them a very long letter saying, "Hey guys, do you know what you're doing? You're a charity. The medianincome, the people you're suing is very low by a zip code." We've been going hospital by hospital talking to the hospitals trying to figure out, like try to unpack this because we take no pleasure. I just want to be very clear.

Hospitals, they're saving people's lives right now. We're in the middle of a global pandemic. These people are heroes and sheroes out there. We love our hospitals in New York state. We are shocked and dismayed to see that all these charities are suing their patients. Northwell was relatively unrepentant when we met with them. The other hospital systems we've met with, one just said, "We're never going to sue another patient again." The other system said, "Oh my god, I can't believe we're suing for interest, a 9% interest rate, the maximum allowed by the commercial rate. We're going to revamp our whole financial aid policy and really rethink about-- Make suing patients more like I never event."

I guess that's what I would say is that Northwell, unfortunately, is only pausing it. They, in our regional study, were responsible for nearly half the litigation against patients, and a pause is not a real revisiting of their practices. It also means that they can't just re-initiate. They aren't just discontinuing these cases with prejudice, as we say, in [unintelligible 00:06:36] We're covering litigator. It means that they're not permanently discontinuing lawsuits against these patients. They're saying, "Oh, we'll come back later and resue you again."

I think the thing that's distracting about Northwell is that they're using a notorious medical debt collection called [unintelligible 00:06:53]. They've actually been in the subject of a class-action lawsuit saying that [unintelligible 00:06:59] doesn't use process servers that actually serve the people with these collection cases. In fact, what we see in these medical debt collection cases when we pull them is that 99% of the defendants, the patients never show up in court. Which indicates that they probably don't even know that they've been sued in the first place. We find out often that people only figure out that they've been sued when their wages have been garnished or their bank accounts have been attached.

Brian: Now, listeners we can take a few questions for Elisabeth Benjamin, vice president of Health Initiatives at the Community Service Society of New York and co-founder of the Health Care for all New York Campaign. How are you doing with your COVID medical bills? Have you been sued? If you're insured, how's the coverage turning out to be, including if you're a long hauler suffering with long term effects of COVID? Or maybe you've been fortunate enough to avoid getting the virus but are out of work because of the pandemic and have other medical bills.

Maybe you've been sued during this period. It isn't just about people who have COVID. Help us report this story. Give us a call 646-435-7280, 646-435-7280. If you have a story or if you have a question for Elisabeth Benjamin, 646-435-7280 or tweet your questions or comments @BrianLehrer.

For some of these smaller hospitals especially upstate, Elizabeth, that don't bring in billions of dollars of revenue every year, how much of a financial strain has the pandemic created?

Elisabeth: It's hard to know. The smaller systems are not so small unfortunately anymore. For example the St Peter's health partners, their mother ships out in the Midwest. They're acquiring more and more local hospitals. I think they're attempting to take on Ellis. What we're seeing throughout the hospital system in New York is a real consolidation. Bigger systems like Northwell are taking over smaller system. For example, Northwell has what's called the clinical affiliation with Crouse Hospital in Syracuse. That hospital was one of the biggest suers along with Northwell's John T. Mather. Interestingly, after we talked to them extensively about Crouse, they said, number one, they had nothing to do with it.

I think Crouse is one of the hospitals that said, "Oh my goodness, what are we doing?" They've only sued 13 people during the pandemic so that's very good. I think the other system, St Peter's health partners, I think they've gotten quite a bit of money as well. Well, for example, yes. They've received tens of millions as well. There's so many hospitals, I have to add them up one by one and I wasn't ready for that question but I think they got $26 million

Brian: Right.

Elisabeth: For St. Peter's alone. They did 217 cases for just that one hospital. If you think 1,900 times 217, that's nowhere near $26 million. In fact, if you take all 4,000 cases, and times it times 1,900, [unintelligible 00:10:17] $7 million. I think what I'd like to say, Brian, is that this does nothing to improve hospitals, bottom line. It just inflict misery on patient, because the amount they're suing for are so de minimis.

Brian: I want to take a caller Lydia in Manhattan, who has a very interesting point about how to think about hospitals in general, in New York State, that relates to something you said before. Lydia in Manhattan, you're on WNYC. Thank you for calling in.

Lydia: Say that two things. First of all, this isn't new just during the pandemic. If you look at statistics going back, medical debt from hospitals is one of the number one causes of personal bankruptcy for individuals. I think calling hospitals a charity can be almost misleading and this is no slam on our medical system. I really respect doctors, I respect hospitals, but they're not-for-profits, who pay their chief executives, millions upon millions of dollars, and who operate with very intense business forward ideas about how to collect debt from people. That's just a fact.

Brian: Lydia, thank you for two very important points. Let's take them one at a time. Elisabeth, on the second one, people don't think about this much one way or the other. Even these giant medical systems, like Mount Sinai, New York Presbyterian, Northwell, they're not businesses. They're technically charities, as you said before and there are for-profit hospital chains in other states, New York doesn't allow them, but it's hard not to think of them as businesses.

Elisabeth: That's right. I think that's one of the reasons why we're so concerned about it is that, Northwell, for example, has $11 billion in revenue, billion [chuckles] every year. They boast, rightfully, that they're one of the biggest employers in the state, and they're an engine of economic growth. I think, as a Superman, and the Superman movie says, "With great power comes great responsibility." I guess I'm paraphrasing there. I think we really need them to take a deep look at the responsibility that they are charity. They shouldn't be inflicting misery for $1900 a pop when they are such a rich business.

I think, they're having it both ways. I totally agree with the caller on both accounts. We really need to rethink whether hospitals are, either should be considered businesses or they should be considered charity. I believe they should be considered charity because they're in the business of saving lives every day. Therefore, they have no business being suing any patient, except if it's a never event. If a extremely wealthy person walks off without a bill, of course, they should sue that person but that's not what's happening here.

Brian: On Lydia's other vital point, that this may be coming more to light for more people because of the pandemic but medical debt lawsuits have become a lot more common in general in the last few years, and people of color are more likely to be impacted by medical debt as your report for the Community Service Society reminds us. What's the bigger picture policy conversation that needs to take place, even when the pandemic is over?

Elisabeth: We talk about health disparities all the time. What our report shows is that, for example, in Syracuse, 41% of the communities of color have medical debt versus 12% of white people. Similar disparities are in Albany, Erie County, Monroe County. We have disparities on a lesser percentage order because of the large population downstate, but it's still true in every single borough people of color have more medical debt than their white counterparts.

If we're serious about structural racism, banning the practice of charity being able to sue their patients for medical debt would be an important good first step. I think it shouldn't be tolerated at all, or at least treated as a never event, very, very rare circumstances should a-- I think a hospital CFO should be signing off on every single one of these cases before they choose to sue their patients. That would be a charitable outcome. That would be consistent with being a charity. Maybe the board of directors should be aware of it. Maybe they should be looking at each patient's family circumstances and employment circumstances before they ruin their life.

Brian: Elisabeth, I've got a fact check for you. It's not anything you said about the nature of hospitals and their revenue. It's not anything you said about medical debt or who's the most susceptible. It's not anything you said about what policy should be in this area but I am told that the quote, "with great power comes great responsibility," was Spider-Man, not Superman.

Elisabeth: Oh my God, I'm so sorry. I'm sorry. I think I was a little nervous. It's true. It's Peter Parker. [laughs] I'm so sorry. I really got to work. I got [unintelligible 00:15:57]

[crosstalk]

Brian: Rose in Brooklyn.

Elisabeth: My kids would kill me right now by the way.

Brian: There you go. Don't make them listen to this segment. Rose in Brooklyn, you're on WNYC. Hi.

Rose: Hi, Brian. I haven't been sued by a hospital but there's one that I go to, I got to an Eye Clinic there every six months. One of the recent visits, I didn't pay a copay at the time because they have all the security around COVID and just nobody asked me for it. Within three weeks of my visit, I was getting calls from this hospital asking me why I hadn't paid my $20 copay. To me, that was pretty aggressive, bill collection for something so small and minor. They weren't suing me but still, it's like, "Well, send me a bill and I'll pay it." That was my response.

Brian: Elisabeth, anything for Rose?

Elisabeth: I really am so glad Rose raised this. We're pushing the Community Service Society, healthcare for all, the AARP, a whole group of consumer advocates are pushing a bill in Albany called the patient medical debt Protection Act. First of all, would eliminate the 9%, interest gouging, commercial interest rates being used by hospitals, but it would also simplify medical billing. Right now, when you go into a hospital, you end up with-- We have one patient that went in for a kidney stone and came out with 27 different bills, anesthesiologists, the surgeons, the radiologists, [unintelligible 00:17:37] It's just insane. That should not be allowed.

It would simplify and improve billing transparency. It would also say, "Look, hospitals can't--" Every time a local physician practice gets picked up by Mount Sinai, that practice shouldn't be tacking on $150, so-called facility fee, or overhead charges from Mount Sinai. We had one woman go in for her annual free preventive mammogram and came out of Mount Sinai, radiologists with a $150 facility fee. That's not what we're talking about. That should not be allowed to happen under the Affordable Care Act.

It has a whole bunch of other provisions that would really strengthen and protect patients from medical debt. It's got a lot of momentum in the assembly. It's got 35 members of the assembly on. I think 18 or 19 members of the Senate and we're really looking to try to get that enacted this year, because we think it would really improve patient's lives. We were lucky that the Cuomo administration did pick up one provision last year in that last-minute budget cycle and they curved the statue of limitations, the length of time of the hospital can sue you from six years to three. I think we're on our way, and I feel hopeful.

Brian: Maggie in Bergen County, you're on WNYC with Elisabeth Benjamin from the Community Service Society. Hi, Maggie.

Maggie: Hi, so nice to talk to you. I just have a question about medical bills. I've heard a rumor that you can negotiate medical bills down if you call the hospital and I just don't know if that is a rumor or if it's a reality.

Elisabeth: That is absolute reality. You should definitely do that. The one thing that as a patient advocate I really encourage people not to do is to put your bills aside. Try to get in there early and often, every single hospital must have a financial assistance policy. It goes well up to federal poverty level. For example, Northwell itself boasts of a financial aid policy, it goes up to 500% of poverty. Other hospitals are even more generous going up to 600% of poverty. Hospitals will often cut back the amount that you owe. They will work out a repayment plan, but make sure you ask for financial assistance.

Hospital prices are so extraordinary and that's the other piece is that don't let them charge you the rack rate, the top commercial rate that they have. Tell them, "I want to pay the Medicaid rate. I want to pay the Medicare rate, and I want a discount off of that rate." Be really pushy about that. You can also, if you live in New York state call the Community Service Society, community health advocates, 188-861-5400. We help people negotiate their debt all the time. That's what we do every single day. We're really lucky that New York state has a robust consumer assistance program, which was originally started on the Affordable Care Act.

Brian: Listeners, if you want to get something to write with, I'll ask Elizabeth to give that phone number one more time in a minute, if you need that particular help as an individual. But last question, before you do that, Elizabeth, should there be a moratorium on medical debt lawsuits for the duration of the pandemic? Just like there's an eviction moratorium.

Elisabeth: Yes. In fact there was a bill that was proposed in may. I have to say that governor Cuomo and attorney general Latisha James were awesome. Right in March, they put a moratorium on all the SUNY, the five SUNY hospital systems. We'd like to see that [unintelligible 00:21:09] that moratorium adopted by every single so-called nonprofit, charitable hospital in New York state.

Brian: What was that phone number again for your group, the Community Service Society, and who can you actually help?

Elisabeth: 888-614-5400. We can help anybody in New York state that has a medical debt or insurance problem. We're here to help you and we'd be delighted to do so.

Brian: Elizabeth Benjamin is vice president of Health Initiatives at the Community Service Society of New York and co-founder of the Health Care for all New York campaign. Thank you so, so much for your work in this area and for coming on and sharing it with us.

Elisabeth: Thank you.

 

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