We've written frequently about the ways that hospitals, doctors and bill collectors seek to collect medical debt from patients. It seems providers in South Carolina have a new tact.

South Carolina ‘Loophole’: Hospitals Access ‘Residents’ Tax Refunds for Unpaid Bills’

We’ve written frequently about the ways that hospitals, doctors and bill collectors seek to collect medical debt from patients. It seems providers in South Carolina have a new tact.

The Charleston Post & Courier has reported an extraordinary story: “A loophole lets SC hospitals take millions from residents’ tax refunds for unpaid bills.”

The post states: “South Carolina hospitals are using a loophole in state law to scoop millions of dollars a year from the pockets of the poorest of patients. It mostly takes place outside the courts and the public eye.”

“A law originally written to help state and local governments collect debts is being used to seize tax refunds from people with past-due medical bills. The S.C. Department of Revenue does the legwork, and the cash flows straight into the coffers of some of the region’s largest health care companies.”

It continues: “Together, health organizations took at least $92.9 million in more than 172,000 seizures to pay off past-due medical bills in 2017. The state and a private lobbying group for South Carolina’s counties make millions more helping hospitals collect these debts from people’s tax refunds. Patients foot the bill for that work, with as much as a $50 fee tacked onto their debt, giving both groups a boost.”

The Associated Press adds: “The state benefits by tacking on a $25 debtor fee to each seizure, collecting a total of $12.6 million in 2017. The South Carolina Association of Counties, a lobbying group for county governments, also collects $25 for processing each claim.”

“Unpaid medical bills are the largest drivers of debt and bankruptcy for South Carolina’s poorest people.”

For more information on the issues surrounding medical debt, please contact RIP Medical Debt.