Report Blasts Texas Hospitals For Filing Collection Lawsuits

A number of hospitals and healthcare facilities in Texas, along with the collection law firms that represent them, are the subjects of a report that was issued yesterday, indicating that individuals were still being sued for unpaid debts even after the governor declared a state of emergency in the Lone Star State.

The report, called “Eroding the Public’s Trust: A Report of Texas Hospitals Suing Patients” also includes the subtitle, “Predatory Medical Billing Report”, and was published by Restoring Medicine, an organization that demands “a more honest and fair health care system” here in the United States. It examined lawsuits filed in state courts in Texas to collect on unpaid healthcare debts between January 2018 and February 2020, but also included some data from after the coronavirus pandemic struck in mid-March. More than 300 lawsuits have been filed in the past two months by hospitals seeking to collect on unpaid medical debts, according to the report.

About 7% of the 414 hospitals in Texas filed a collection lawsuit during that timeframe, according to the report. The facilities filed more than 1,000 lawsuits during the period that was analyzed, seeking to recover about $18 million in unpaid debts. The researchers conclude that while the $18 million represents a small amount (0.15%) of the total revenue earned by the facilities during the two years, that total “had catastrophic consequences for hard-working families who represent the low to lower-middle working class in Texas.”

The report also highlights that one collection law firm is responsible for filing more than 80% of all medical collection suits in Texas during the period that was studied.

“What justification is there in these practices that devastate patients’ lives yet make minimal impact on the finances of a hospital system?” the report asks. “The unstandardized hospital billing structure and communication pave the way for immoral practices, such as suing patients for medical debt.”

Consumer advocates were quick to jump on the report’s findings.

“I’d say, fast forward a year from now, regrettably or not, we’ll see a ton of bankruptcy,” said Dana Karni, an attorney for Lone Star Legal Aid, which provides free legal services to low-income Texans, in a report. With lack of income and mounting bills on cars, medical visits and other expenses, “I don’t see how consumers can come out from all the debt.”

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