Hospitals in Wisconsin filed 37% more collection lawsuits in 2018 than they did in 2001 and obtained garnishments in more than half of their cases, while also disproportionately suing individuals living in low-income neighborhoods and who are African-American, according to the results of a study that was published yesterday in Health Affairs.
About 1.5 out of every 1,000 residents in Wisconsin was sued for an unpaid medical debt in 2018, compared with 1.1 in 2001, according to the study. That works out to about 3,000 more lawsuits that were filed in 2018 than were filed in 2001. The average amount of unpaid medical debt sought in collection lawsuits varied between $2,522 and $3,939. The number of cases where a garnishment was ordered increased from 41% to 52% during the timeframe that was studied.
Wisconsin is one of the states that did not participate in the Medicaid expansion program under the Affordable Care Act, giving the researchers a more consistent set of data to analyze, without sharp changes in insurance coverage or other extenuating circumstances that could have impacted the number of lawsuits filed.
When looking at the number of lawsuits filed by race, African-Americans were sued at a rate of 1.86 suits for every 1,000 residents, compared with 1.32 for every 1,000 White residents, 1.1 for every 1,000 Hispanic residents, and 0.11 for every 1,000 Asian-American residents.
The top 10% of hospitals that filed lawsuits to recover unpaid medical debts accounted for 40% of all lawsuits filed.
Hospitals in Colorado, Texas, Virginia, Oklahoma, New York, Tennessee, Kansas, Maryland, and Wisconsin — as well as nationwide hospital networks — have all been accused of being “too aggressive” by filing lawsuits to collect on unpaid debts. Many hospitals have stopped filing collection lawsuits and enforcing judgments as a result of the publicity. Earlier this year, UVA Hospital in Virginia announced it was wiping out many of its outstanding liens and judgments dating back to the 1990s, a move that was expected to impact tens of thousands of families.
In fact, the bad publicity surrounding the processes through which hospitals attempt to collect unpaid debts has led to a decrease in the number of lawsuits filed against individuals, according to a recently released study
