Hospital uses for-profit subsidiary to sue patients, garnish their wages

Mosaic Life Care does not want to let go of its patients. The not-for-profit hospital (formerly known as Heartland Regional Medical Center) and the only acute care provider in St. Joseph, Missouri, used a for-profit subsidiary to systematically sue and obtain judgments from about 6,000 patients over the past five years, ProPublica has reported.

The Mosaic subsidiary, Northwest Financial Services, has seized some $12 million from the patients from whom it has obtained the judgments.

Northwest Financial Services also went through the collections process against patients who would have qualified for charity care under Mosaic Life Care's guidelines, according to ProPublica. And despite operating in an economically struggling region, Mosaic Life still reported a net income of $45 million last year.

Suing and obtaining judgments against patients is common in several states--in Missouri, some 15,000 such suits were filed in 2013, with Kansas, Oklahoma, Nebraska and Alabama comprising hot spots. Carolinas Healthcare also has been active in pursuing claims against its patients, oftentimes for nominal sums. Altogether, some 43 million Americans have some form of unpaid medical debt.

According to ProPublica, many of those patients against whom Northwest obtained judgments had minimum wage jobs. Nevertheless, they were charged full prices for the care they received.

The judgments included annual interest rates of 9 percent, the maximum under the law, and often four-figure fees for attorneys. The hospital prevails in nearly 80 percent of its cases, and less than 10 percent of the time does a patient appear in court with an attorney.

At one of the largest employers in St. Joseph, a pig slaughterhouse, 11 percent of its total workforce has had their wages garnished by the hospital.

By comparison, BJC Healthcare, Missouri's largest acute care provider, sued a total of 26 patients last year. It makes specific efforts to identify low-income patients and does not file lawsuits against them, officials told ProPublica.

Mosaic officials suggested to ProPublica that securing payment for services rendered--via charity care or other means--is entirely the responsibility of the patient.

"No one goes into this with the goal or the desire to ruin someone's life," Mosaic Chief Branding Officer Tama Wagner told the publication. "But at the same time, the services were rendered, and we have to figure out how to get them paid for." Wagner could not say why patients were sued.

Some patients have paid up as much as $20,000 and still have not covered the majority of what they owed, with interest continuing to mount. One patient who has been sued multiple times has had wages from her $8.20-an-hour fast food job garnished, and a judge suggested a larger amount could be taken away. Under Missouri law, anyone earning more than $870 a month can have their wages attached.

To learn more:
- read the ProPublica article

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