TITLE: Held in bondage: US patients losing equity in homes to hospital lawsuits
https://www.theguardian.com/us-news/2023/nov/06/hospitals-lawsuits-atrium-north-carolina
EXCERPT: Terry and Sandra Belk’s medical bills began to pile up after a series of illnesses – including breast cancer, prostate cancer and gallbladder surgery – repeatedly sent them to the largest hospital system in Charlotte, North Carolina, Atrium Health.
Despite having commercial insurance, the Belks received bills for tens of thousands of dollars. When the couple couldn’t pay, Atrium sued them through North Carolina’s civil courts.
Like millions of Americans, Terry Belk – Sandra died in October 2013 – is stuck in medical debt. Unlike so many others, because of North Carolina’s debt system, it also means that when the hospital successfully won a judgment against him, they claimed ownership of part of the equity on Belk’s home.
“This is putting tremendous pressure on my health,” said Belk from the dining room of his three-bedroom, two-bath one-story ranch that sits atop a small hill. “On one end, they help you get well. On the other, you get sick again.”
In North Carolina, a successful debt lawsuit automatically places a lien on real property, a kind of collection method that secures a debt against the value of a home. For most people, that property lien is on the family home.
Belk, 67, cannot retire because of the debt. Sandra nearly refused to see doctors in her dying days because of the debt. The lien will need to be paid before the home can be sold or transferred to Belk’s heirs – he has five children and 10 grandchildren. For Belk, medical debt is nothing short of “bondage”.
“I’ll probably die before it’s paid out,” said Belk. “We are married,” he said of himself and the hospital. “It’s till death do us part.”
Medical debt and the burden it places on Americans has come under increasing scrutiny following the pandemic. A recent investigation by Kaiser Family Foundation news found the majority of the nation’s 5,100 hospitals probably use “extraordinary” collection measures, including suing patients.
In North Carolina, the practice received heightened attention after the state’s treasurer, the Republican Dale Folwell, published a report finding “litigious” hospitals in the state had filed more than 7,500 lawsuits in just five years. The most litigious, in sheer volume, was Atrium. Officials there said they stopped suing patients in November 2022, “as part of our journey in making health care more affordable”.
However, the non-profit stopped short of providing relief to patients such as Belk, who both has liens on his home and was encouraged to take on credit card debt to pay the hospital, because he worried about future lawsuits.
TITLE: Despite measures, New Yorkers fear health care over medical debt lawsuits
https://www.pressrepublican.com/news/despite-measures-new-yorkers-fear-health-care-over-medical-debt-lawsuits/article_39dccd34-7b90-11ee-bc04-6767c5a30eb0.html
EXCERPT: In February 2017, Russell Gosselin was admitted to Glens Falls Hospital for oropharyngeal cancer, a throat cancer caused by HPV. He underwent one surgery to remove his tonsils, another to take a piece of his tongue, and numerous radiology treatments. Almost a year later, the hospital billed him over $17,500.
The hospital told him not to worry about the cost. Since Gosselin didn’t have insurance, he qualified for financial assistance, which brought his bill down to just shy of $5,000 — a sum higher than most Americans have in savings. Gosselin still couldn’t pay.
So in 2020, the hospital sued him through the medical debt collector agency Overton, Russell, Doerr, and Donovan, LLP, or ORDD. Gosselin said he repeatedly tried to set up a $20 monthly payment plan, but the agency declined. Instead, it began garnishing $100 a month from his paycheck.
“My boss told me, ‘I hate to do this to you. But I have to take $100 a week out of your check to pay this bill for Glens Falls Hospital,’” Gosselin told New York Focus.
The wage garnishing stopped when he changed jobs. Gosselin believes that was because of a bill Governor Kathy Hochul signed last year, which makes it illegal to garnish wages and place liens on people’s homes to cover medical debt. She has yet to indicate whether or not she’ll sign another bill, passed by the state legislature in June, to ban reporting medical debt to credit bureaus.
Despite these measures, many patients around New York remain wary that hospital fees could bankrupt them. Neither piece of legislation stops hospitals from suing patients to collect medical debt in the first place. and the state has not assigned an agency to enforce the ban on garnishing wages, leaving it up to the hospitals to honor the spirit of the law.
As a result, the decision not to seize assets from indebted patients looks more like “best practices” than an actual requirement, according to Elisabeth Benjamin, vice president of health initiatives at the Community Service Society. and it’s difficult to track compliance, she added, since the legislation doesn’t include reporting requirements.
TITLE: Consumer Credit Scores Improve After Medical Debt is Wiped from Reports
https://revcycleintelligence.com/news/consumer-credit-scores-improve-after-medical-debt-is-wiped-from-reports
EXCERPT: Last year, three major credit bureaus—Equifax, Experian, and Transunion—announced that starting July 1, 2022, they would increase the time before past-due medical debt collection appears on a consumer credit report from six months to one year.
In August 2022, the Vantage score consumer credit model, one of the country’s most used models, stopped using medical debt in collections to calculate credit scores. Furthermore, in April 2023, the three major credit bureaus removed medical collections under $500 from consumer credit reports.
According to the Urban Institute’s credit bureau data, these changes have eliminated medical debt in collections from most consumers’ credit reports.
In August 2022, 11.6 percent of consumers had medical debt in collections on their credit reports. By August 2023, the share declined to 5.0 percent. Urban Institute researchers estimated that more than 15 million consumers have benefitted from the debt erasure in the past year.
Additionally, consumers’ credit scores have increased since the changes were implemented. Between August 2022 and August 2023, the average credit score among consumers with medical debt collections in August 2022 rose from 585 to 615 points. This shifted many consumers from a subprime level (below 600) to near prime level (between 601 and 660).
At the same time, the average credit score for consumers without medical debt on their records remained largely the same, going from 712 to 711 between August 2022 and August 2023.
These findings indicate that future medical debt reporting restrictions could continue benefiting consumers. The Consumer Financial Protection Bureau (CFPB) recently proposed a rulemaking process that aims to remove all remaining medical bills from consumer credit reports.