The Wall Street Journal is using a rural hospital in Kansas that has started filing more collection lawsuits — largely due to a backlog caused by the COVID-19 pandemic — to spotlight the medical debt problem in the United States and how it is impacting hospitals and patients with medical debt.
The hospital, Pratt Regional Medical Center, had identified about 700 accounts, some of which were close to the five-year statute of limitations expiring. The hospital claims it only takes legal action after more than 10 months of attempting to contact patients and develop assistance plans.
“As long as patients continue to communicate with us to develop an assistance plan, we do not turn their accounts over to debt collection or attempt legal action,” said Tammy Smith, the hospital’s chief executive. The hospital is dealing with increases in operating costs and more patients using high-deductible health plans that require them to pay more out of their own pockets.
Last summer, 80% of all summonses issued in Pratt County were from the hospital, according to the report. It sued about 400 individuals last year, which is more than the combined total for the previous five years.
Medical debt is an acute problem in rural areas like Pratt. They often have higher percentages of older, uninsured patients, and the problem is especially tough in Kansas, which does not offer Medicaid expansion.
Pratt Regional guarantees free care to those living at or below 200% of the federal poverty level. However, many patients were unaware of this assistance, according to the report. The hospital spent less than 0.2% of its expenses on financial assistance in fiscal 2022.
Hospitals in North Carolina, Colorado, Texas, Virginia, Oklahoma, New York, Tennessee, Kansas, Maryland, New Jersey, and Wisconsin have all accused of being “too aggressive” by filing lawsuits to collect on unpaid debts.
