North Carolina hospitals, primarily non-profit, brought nearly 6,000 medical debt lawsuits against their patients and their families, according to a new analysis.
The report by Duke University School of Law and the Office of State Treasurer (OST) researchers highlights the harsh measures hospitals in the United States take against their patients who are unable to pay medical bills that only increase with interest charges.
From January 2017 through June 2022, North Carolina hospitals brought 5,922 lawsuits over medical debt to 7,517 patients and family members. The actions generated nearly 3,500 judgments for hospitals totaling $57.3 million.
Five hospital systems — Atrium Health, Caromont Health, Sampson Regional Medical Center, Community Health Systems, and Mission Health — filed 96.5% of the collection actions over the five-year period. Additionally, 90.6% of the medical debt lawsuits against patients were initiated by non-profit hospitals.
Interviews with patients revealed that in response to lawsuits, defendants increased their mortgages, canceled their retirement, and reported losing their primary source of equity and upward mobility when the hospital won liens against their houses.
A 70-year-old couple owes nearly $200,000, half of the amount in interest, to Atrium Health for medical bills that are more than a decade old. When a husband had a heart attack in 2009, he was uninsured and only months away from qualifying for Medicare coverage.
As the hospital refused to postpone surgery due to his critical condition, employees assured the wife they could receive financial help with the bills. However, all requests for financial assistance were denied, and the couple lost their house. And the interest charges keep adding hundreds of dollars to their debt every month.
"The hospitals are very vicious. I'm 70 years old, and I'm still working, knowing that we will never have any equity in this house. We're just thankful that they didn't put us out on the road because they could've. We're not rich people. We went through everything to get help on those bills, and they said 'No,'" says the wife who had to cancel her retirement.
According to the report, hospitals took advantage of North Carolina's 8% annual interest allowance on judgments. These interest charges and other additional fees totaled 35.4% of the judgments awarded.
After undergoing cancer treatment several years ago, another patient was left with a $28,000 medical debt to Atrium Health. Since 2017, she has been paying $125 to the private-equity-backed "medical credit card" company AccessOne, a hospital partner. Nevertheless, when contacted by OST researchers, she learned that Atrium Health had filed a lawsuit against her.
"We've got limited money and can only spread it around so far. … Unless I sell my house, I will never be able to pay that off. If I could, I'd pay it off happily. They saved my life — I just don't have the money right now," she says.
According to a recent report from an international organization Human Rights Watch, the U.S. government's lack of guidance and oversight over private non-profit hospitals allows them to pursue medical bills against patients aggressively.
- Duke University School of Law. Hospitals Suing Patients: How Hospitals Use N.C. Courts to Collect Medical Debt.
- N.C. Office of State Treasurer. Hospital Lawsuits.