Bad PR Leads to ‘Substantial’ Decrease in Medical Collection Suits: Study

The influx of media reports aimed at spotlighting “aggressive” collection efforts by hospitals and healthcare networks has led to a “substantial” decline in the number of lawsuits filed against individuals with unpaid healthcare debts, according to a new study.

Looking at the number of collection lawsuits filed in Virginia before and after a series of published reports that disparaged the practice, researchers found a 59% decrease in the number of collection lawsuits filed against individuals with unpaid medical debts during the 12 months before the articles were published and the 12 months after they were published. The total amount sought in collection lawsuits decreased 64%, to $14 million from $38.7 million, according to the study, which was published by the Journal of the American Medical Association (JAMA).

The University of Virginia Health System has been the subject of numerous media reports in recent years for filing too many lawsuits and attaching too many liens to try and recover unpaid medical debts. The health system responded by creating a council to make recommendations and wiping out tens of thousands of liens and judgments.

One out of every six hospitals that was suing patients in Virginia for unpaid medical debts stopped doing so as a result of the media reports, according to the study. Those that continued to sue were mainly nonprofit facilities, which have higher markups and lower revenues than for-profit hospitals.

“The data from the research article in conjunction with the media coverage brought a problem to light that few people were aware existed, enabling people to advocate for affected individuals,” the researchers concluded. “The negative attention brought by the media, coupled with individual patient testimonies, may have resulted in the decreased number of lawsuits in the post-intervention period.”

The study did not indicate whether the money that could have been recovered via collection lawsuits was ultimately recovered or how the hospitals made up for the decrease in revenue.