Nonprofit hospitals pay virtually no local, state or federal income tax. According to published reports, that doesn't stop them from going after medical debt.

How Nonprofit Hospitals Use Collections, Sue for Medical Debt

ProPublica writes: “Nonprofit hospitals pay virtually no local, state or federal income tax. In return, they provide community benefits, including charity care to low-income patients.”

The publication then tells the story of Methodist Le Bonheur Healthcare in Memphis, which “has brought 8,300 lawsuits for unpaid medical bills in just five years.”

States ProPublica: “From 2014 through 2018, Methodist filed more than 8,300 lawsuits, according to an MLK50-ProPublica analysis of Shelby County General Sessions Court records. Older cases…remain on the court’s docket.”

And Methodist Le Bonheur Healthcare is not alone.

“Other hospitals in Memphis and around the country also sue patients,” writes ProPublica. “According to a study published Tuesday in the Journal of the American Medical Association, researchers found more than 20,000 debt lawsuits filed by Virginia hospitals in 2017. More than 9,300 garnishment cases occurred that year, and nonprofit hospitals were more likely to garnish wages.”

Indeed, JDSUPRA adds: “Johns Hopkins researchers found by examining 20,000 lawsuits and other court and medical records that ‘36% of hospitals in Virginia garnished patient wages to collect payment for medical bills in 2017,’ according to a Becker’s industry report, which added that, ‘Most of the hospitals that garnished wages (71%) were nonprofit.’”

“NPR and the Wall Street Journal both bounced off that research to scrutinize the practices of Mary Washington Healthcare, reporting on the aggressive debt collection practices of the Fredericksburg, Va., not-for-profit regional system of two hospitals, three emergency departments, and more than 40 health care facilities and wellness services.”

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