Hospitals stopped suing patients for unpaid medical debt after media exposure, public pressure, study suggests

A stack of medical bills
Virginia hospitals filed 59% fewer medical debt lawsuits against patients in the wake of an academic study and dozens of news articles highlighting their collections tactics, according to a recent review. (Griffin Pivarunas for KHN)

Published studies and bad press about hospitals’ medical debt lawsuits led to a substantial decline in the number of collection cases against patients.

The combination of research, media coverage and patient advocacy resulted in a statewide decrease of warrant in debt and wage garnishment lawsuits filed against patients, according to a recent study.

“Our findings indicate that hospitals can respond to public awareness that is data-driven,” researchers wrote in a JAMA Network Open study published last week.

The observation comes two years after the publication of another study highlighting more than 20,000 warrants in debt lawsuits and 9,200 wage garnishment cases filed by 36% of Virginia’s hospitals in 2017.

This initial study, according to the researchers, picked up momentum in the press and was cited by at least 82 local and national news stories that, in some cases, singled out specific organizations as major offenders.

To explore whether these articles and the public pressure that followed had an impact on medical debt lawsuits, researchers reviewed the number of collection lawsuits filed by Virginia hospitals during the year before the original study’s publication (June 25, 2018 to June 24, 2019), the roughly 2.5 months following publication when it was often cited by news outlets or advocates (June 25, 2019 to Sept. 10, 2019) and a 12-month “post-intervention” period (Sept. 11, 2019 to Sept. 10, 2020).

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In doing so, the researchers found a 59% decrease in the number of medical debt lawsuits filed by the hospitals during the 12 months before publication and the post-intervention period. The total amount of money pursued in court also fell 64%, from $38.7 million to nearly $14 million.

Further, 11 of the 67 hospitals that were found to be suing patients halted the practice after the initial study’s publication, the researchers wrote. Those that continued to do so were often (71%) nonprofits, and had a higher mean price markup and a lower mean annual net revenue than those that stopped suing patients for unpaid bills.

“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 wrote. “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.”

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The researchers noted that their analysis has some limitations, most notably that certain debt collection practices would not be present among court records and that the post-intervention decline in cases could be the result of other outside factors.

Still, they said the findings suggest that patients could benefit from a “feedback model of public accountability”—for instance, a transparent ratings system for hospital billing practices that could be accessible by the public and healthcare stakeholders alike.

Medical debts are a major burden for much of the population.

In July, a sampling of debt listings reported to one credit bureau between 2009-2020 suggested that these bills now outweigh all other sources of debt combined as the largest contributor to personal debt in the U.S.

These expenses not only impact patients’ ability to pay other bills and obtain reliable food or housing, they can also lead to worsened long-term outcomes as patients choose to defer preventive care.