Over the past half decade, 15,710 collections lawsuits have been filed against patients by or on behalf of Aurora, Colorado-based UCHealth, according to a recently published investigative report.
Most of those lawsuits were filed by third-party collections companies, allowing the nonprofit to keep its name off the litigation, the Colorado Sun wrote of the investigation it conducted alongside 9News in partnership with the Colorado News Collaborative and KFF Health News.
UCHealth reportedly told the news outlets that 99.93% of its bills are resolved without needing to involve the courts, and that fewer such cases were filed in 2023 than during prior years. However, the average 3,142 lawsuits per year disclosed by UCHealth still makes it among the most litigious health systems in Colorado, consumer advocates reportedly said.
“They are essentially deliberately using those third-party collection agencies to obscure the fact that they are the ones suing the patients,” Adam Fox, deputy director of the Colorado Consumer Health Initiative, a consumer advocacy group that assists patients in medical bills disputes, told the Sun. “It makes it really hard for the patient to untangle.”
UCHealth reported nearly $7 billion in total operating revenue, $331.7 million in operating income and $846.6 million of net income during the fiscal year ended June 30, 2023, according to financial documents. Its network of hospitals and clinics extend into Wyoming and Nebraska.
UCHealth told the outlets that it collects about $5 million per year from the lawsuits. That amount comprises about 0.07% of its net patient revenue and is enough to pay for the salaries and benefits of about 60 employees, it said.
The third-party collectors file these lawsuits in their own names and receive an undisclosed cut of whatever money comes from the lawsuit.
A representative of UCHealth told Fierce Healthcare that "about a dozen" communications will be sent to a patient before their account goes to collection and that "any cases that go to court clearly state our name and the location where the patient received their care, and by that time, the patient will have received about 20 communications from both UCHealth and the collections agency."
The representative also highlighted the "presumptive eligibility review" for financial assistance eligibility UCHealth conducts before sending a case to collections.
The Colorado Sun's story highlighted a case in which a patient, who was told they qualified, was sued for the full amount of their debt and had difficulty having their account corrected. UCHealth told the publication that their case was an error.
Jacki Cooper Melmed, UCHealth’s chief legal officer, told the outlets that the lawsuits are “common practice” among large health systems and that she doesn’t believe UCHealth is “an outlier” in its practice or the frequency of lawsuits considering its large patient volumes. A representative of the system reaffirmed this stance to Fierce Healthcare and highlighted the roughly 3 million patients UCHealth treats per year.
Other large Colorado health systems contacted for the investigation—HealthONE, AdventHealth, Banner Health and SCL Health (now part of Intermountain Health) said they do not currently sue their patients for payments. Two others, CommonSpirit Health and Children’s Hospital Colorado, reportedly confirmed using debt collectors to file lawsuits on their behalf.
A KFF Health News investigation from late 2022 found that about two-thirds of hospitals sue patients or take other legal action against them over unpaid medical bills, while a quarter sell that debt to collectors.
An analysis of North Carolina courthouse records published last summer found that more than 9 in 10 such lawsuits directly filed by hospitals came from nonprofits. Other data from Wisconsin hospitals suggest that the volume of such lawsuits has increased since 2001.
Aggressive debt collection practices such as these have recently led policymakers to question whether nonprofit hospitals deserve their tax-exempt statuses. The scrutiny alone could drive results, though, as research suggests, the bad press that comes with medical debt lawsuit exposés does persuade hospitals to adjust their policies.