Atrium Health and four other hospital systems account for 96.5% of all the medical-debt collection lawsuits researchers from Duke University’s law school and State Treasurer Dale Folwell’s office could identify as having been filed in North Carolina in recent years.
By itself, Atrium accounted for 41.9% of the lawsuits — 2,482 out of 5,922 filed between January 2017 and June 2022, according to the study that went public on Wednesday.
Two of the remaining four systems, CaroMont and Community Health Systems, are also in the Charlotte region. They accounted for another 1,783 and 538 cases, respectively, helping make the 10-county area around North Carolina’s largest city ground zero for the problem.
Researchers said the extensive use of the courts to collect on medical debt is contributing to poverty and ill health, and Folwell said Wednesday that it’s “tantamount to elder abuse.”
“Hospitals are supposed to care for patients, not overcharge them, sue them and take their homes,” said Folwell, who’s running for the Republican gubernatorial nomination. “These hospitals are destroying the upward mobility of whole families, hurting cancer patients’ recovery, and creating intergenerational poverty. They must be stopped.”
Atrium officials issued a statement Tuesday that said “as a current practice, Atrium Health does not file any lawsuits against patients, nor do we execute on any liens or foreclose on property that were filed previously.”
Julie Havlak, a health-policy analyst in Folwell’s office, worked with Duke Law professors Barak Richman and Sara Sternberg Greene on the project. They got an assist from Sean Chen, a data-services librarian at the law school.
Havlak worked at the John Locke Foundation before joining Folwell’s staff, and is a graduate of Hillsdale College, a favorite among conservatives. Richman got his degrees from Brown, Berkeley and Harvard, and once worked for New York U.S. Sen. Daniel Moynihan (a Democrat) as a Congressional committee staffer. Greene is a Yale and Harvard grad and did a Harvard Law teaching fellowship under current Massachusetts U.S. Sen. Elizabeth Warren (also a Democrat).
The researchers pulled records from the Administrative Office of the Courts, and used word searches to identify those linked to hospitals.
They hand-checked 109 cases from seven counties to make sure their selection methods were working and also looked through the files of another 57 cases that involved “large judgments” to gather further details.
It’s possible they’ve undercounted cases, as they didn’t capture those filed by third-party debt collectors, private medical practices, ambulance services or other case providers.
All told, the cases yielded 3,449 judgments for hospitals worth a combined $57.3 million. Interest, legal fees and other incidental charges accounted for about $20.3 million of the total, a fact that drew additional criticism from the researchers because state law allows those tack-ons.
“North Carolina is an unfortunate leader in medical debt,” they said in the report. “Over 20% of the state’s families have been subject to collections proceedings because of medical debt, fourth highest nationwide, and the state is home to many of the industry’s worst practices.”
Shortfalls in charity care, hospital and medical-practice consolidation, opaque pricing and exemptions from unfair-trade-practices and anti-trust law all contribute to high prices, and many patients don’t even contest cases because they don’t know they’ve been filed, or sometimes because they’re too sick to go to court.
The other two hospital systems the report singled out are Mission Health, which operates in western North Carolina, and the Sampson Regional Medical Center, which operates Down East. They accounted for 250 and 659 cases, respectively.
Three-quarters of all the cases were filed in just five counties — Mecklenburg, Gaston, Cabarrus, Iredell and Sampson.
In its prepared statement, Atrium Health added:
“With over 15 million patient interactions each year, Atrium Health has the privilege of caring for each community member in a way that is personalized for their specific needs. Atrium Health doesn’t turn away anyone needing medical care, regardless of their ability or inability to pay for their care. In 2021 alone, we provided $2.46 billion in free and uncompensated care and other community benefits.
“When patients accumulate bills and need help, and we are provided with the proper information, we can help them select plans or programs that could help them resolve — and eliminate — their debt. In fact, an average of 275 patients each day never receive a bill for the care they received, totaling over $437 million each year. We recognize that each patient’s financial situation can change quickly or over time and we have over 150 teammates dedicated to working with them to determine if financial assistance is available for their specific scenario. This can be in the form of full or partial forgiveness of balances, discounts or establishing an interest-free payment plan that works for the patient.”
