Local hospitals have filed hundreds of liens on patients’ homes for medical debt

ALBANY – State lawmakers have presented a bill it would prevent hospitals from seizing wages and taking liens on the homes of patients with medical debts after a new report found the practice impacting thousands of New Yorkers per year.

While most hospitals in the state do not report the filing of liens on patients’ homes, the practice is particularly common among some hospital systems that sue patients for overdue debts and win, with St. Peter’s Health Partners to Albany leading the pack, a new report of the Community Service Society found.

The median outstanding debt that triggers the lawsuits is $ 1,900, according to CSS, a nonprofit that has investigated predatory medical debt collection practices in New York City.

When a lien is filed on a person’s house, they usually cannot sell the property without paying off the debt. It can also prevent them from refinancing or obtaining additional loans, such as a home equity loan.

“So if this homeowner’s pipes burst over the next winter, they won’t be able to get a home equity loan to fix the pipes,” said Elisabeth Benjamin, vice president of health initiatives at Community Service Society and co-author of the report. “If they need a car and their car breaks down, they won’t be able to get a car loan. So it really ruins people’s financial security, especially since people’s homes are usually their main asset and their future economic security. “

From 2017 to 2018, the latest years for which data was available, 56 nonprofit hospitals in the state reported placing liens on the homes of 4,880 patients, according to the CSS report. St. Peter’s Health Partners placed the most privileges during this period (955), followed by Northwell Health (830). Northwell stopped suing patients for overdue debts in 2019 after CSS began investigating the practice.

CSS found that the practice of removing privileges from patients’ homes is most prevalent among hospitals in just 15 counties, including four in the capital region. Albany Medical Center and its affiliates filed liens on the homes of 482 patients during this period, Nathan Littauer Hospital in Gloversville filed 358 liens and Ellis Hospital in Schenectady filed 230, according to the report.

During that same period, hospitals that placed privileges collectively received more than $ 442 million in state Indigent Care (ICP) funds that are given to help hospitals offset the costs of care. unpaid and to provide financial assistance to patients in need. That’s about 48 times more than the medical debt they sought to secure by filing liens on patients’ homes, CSS found.

Hospitals have historically championed the practice, calling it a “last resort” after all other avenues have been explored.

“We provide patient financial aid resources, repeatedly attempt to contact patients with overdue payments by mail and phone, and give patients ample time to respond before remitting the debt to a collection agency. “said Sue Ford, spokesperson for Albany. Med. “Ultimately, this is the absolute last resort in our effort to collect payment after all other options have been exhausted. Funding, of course, is essential to continue providing the services our community expects and deserves.

Bea Grause, president of the Healthcare Association of New York State, which represents hospitals statewide, said New York hospitals have a long history of advocating and implementing patient protection.

“The report ignores the extensive work of hospitals to help patients be covered for the services provided and to further isolate them from personal liability if they are eligible for financial assistance,” she said in a statement. “All of this, along with additional communications with patients, precedes going to court for patients deemed capable but unwilling to pay.”

A spokesperson for St. Peter’s Health Partners said on Wednesday that the hospital system is no longer pursuing lawsuits or liens on patient property as part of its efforts to recover unpaid bills.

“The data used for the report is several years old and does not provide an accurate picture of our billing practices today,” said Robert Webster. “Collecting payments for the care and services we provide is necessary to ensure that St. Peter’s Health Partners has the resources to continue providing high quality health care to our community. However, we consider each patient on a case-by-case basis and have many exceptions in place for low-income and uninsured patients. “

Previous analyzes by CSS, including released last March, found that medical debt lawsuits in Albany County disproportionately impact low-income communities of color, with wage garnishments affecting people working in fast food, retail and other industries that would make them eligible for financial assistance under state law.

As pressure builds on healthcare providers to address social determinants of health such as housing and food insecurity, at least 10 states have banned the practice of placing privileges on main residences in all circumstances.

Legislation proposed this year by Senator Gustavo Rivera and Assembly Member Richard Gottfried would prohibit New York hospitals from engaging in the practice or garnishing wages when they obtain court rulings in collection cases medical claims.

The bill had 16 co-sponsors as of Wednesday morning, including Senate Finance Committee chairperson Liz Krueger, who said she was generally asked not to sign bills with financial implications.

“But when I read about it, I immediately said that I will sponsor this because this one is so blatant to me,” she said, adding that she thought the bill would be adopted in the next legislative session.

“The concept that people who were really sick would go to the hospital, get the care they hopefully needed, and then be hit with bills they couldn’t afford to pay, and then surprise – had liens been placed on their home or wages foreclosed? This is scandalous, “she said.” In a humane society, it is scandalous. “

Benjamin said the practice appears to have continued unabated throughout the coronavirus pandemic.

Another report published by his organization last january found that hospitals had sued more than 5,300 patients for medical debt during the 10 months of the pandemic, when the courts were effectively closed to the public. Few patients end up defending themselves when their case goes to court, and many are unaware that they have even been sued, CSS found.

“They think it’s okay to go ahead and sue patients and resort to these extraordinary collection practices,” she said. “And it’s kind of up to us and really to our elected officials to say, ‘No, that’s not OK. “”

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