Texas hospitals are suing patients for unpaid medical bills, a practice that has continued even as the coronavirus pandemic sends unemployment skyrocketing and spurred the state Supreme Court to pause debt collections and eviction proceedings earlier this year.
Hundreds of debt collection lawsuits have been filed since Gov. Greg Abbott declared a state of disaster because of COVID-19 in mid-March, including more than 345 suits brought by facilities associated with one Tennessee-based company, Community Health Systems Inc., according to the Health Care Research and Policy Team at Johns Hopkins University.
While district clerks' offices confirmed medical debt lawsuits have been filed recently, other proceedings have been paused, including default judgments, which hand wins to medical facilities if patients don’t respond. Those were allowed to resume this month, and debt collectors were permitted to restart garnishing bank accounts on cases that have been decided. Accounts frozen before the Supreme Court’s April order were not affected.
Advocates fear the resumption of debt collection could push Texans, already battered by the pandemic’s economic blows, into dire financial straits. More than 1.9 million people have filed for unemployment relief in Texas in the last two months.
“I’d say, fast forward a year from now, regrettably or not, we’ll see a ton of bankruptcy,” said Dana Karni, an attorney for Lone Star Legal Aid, which provides free legal services to low-income Texans. With lack of income and mounting bills on cars, medical visits and other expenses, “I don’t see how consumers can come out from all the debt.”
The Johns Hopkins research team combed through court records and interviewed patients sued for unpaid medical bills in 62 Texas counties — concentrating on the two years between January 2018 and February 2020. Their findings, which were released Wednesday, shed light on what medical facilities have filed lawsuits in Texas, though it’s unclear if the pandemic, which has decimated many hospitals’ revenue, will change those patterns.
“Hospitals are under greater financial strain now … during the pandemic than before, because a lot of their profitable services and their more revenue-generating services are not happening,” said Erin Fuse Brown, a law professor at Georgia State University whose work focuses on health care costs. “It’ll be interesting to see whether or not that increases the pressure on hospitals to seek collection from patients.”
The researchers’ findings show that 28 of 414 examined hospitals sued Texas patients between 2018 and 2020, generally recovering negligible portions of each medical facility’s revenue but financially crippling some patients. A handful of the hospitals — six of which are based out of state — garnished bank accounts and seized indebted patients’ property after winning their suits, the researchers found. The hospitals sued for over $17.8 million in medical debts, with average lawsuits ranging from about $4,000 to $40,000, the report found.