Reporter finds nonprofit hospital’s suit against uninsured patient was just one of many

Dianna Wray

Dianna Wray

In January 2012, EMTs took Ignacio Alaniz by helicopter to Memorial Hermann Hospital, one of the largest nonprofit medical centers in Texas. Alaniz had been working underneath his Buick Century, trying to get it started. When it rolled over him, he suffered a punctured lung, nine fractured ribs and a broken arm.

“By the time the helicopter landed, he was already $12,196.37 in debt,” wrote Dianna Wray, a staff writer for the Houston Press. Her article about Alaniz, “Getting Stuck: Uninsured Patients Slammed with Lawsuits by Not-for-Profit Hospital,” was recognized as one of the best examples of health journalism in the business (small) category in AHCJ’s Awards for Excellence in Health Care Journalism. In a new “How I did it” article, Wray explains how her reporting led her to many more cases of patients being sued for medical debt and some of the reaction the story generated.

Being uninsured, Alaniz was worried about the cost of his emergency treatment and extended care. The hospital staff assured him and his girlfriend that because it was a nonprofit facility it would work them to help them pay for his care. Nine months later they received a bill for $444,518.11 and the hospital’s financial counselor had stopped returning their calls.

“On January 5, 2013, Alaniz was served papers informing him that Memorial Hermann Health System, the largest nonprofit hospital in Houston with a flagship facility in the heart of the city’s world-famous medical center, was suing him for $456,675.23 — the sum of his bill plus interest and $2,500 in legal fees.”

Image by SalFlako via flickr.

Image by SalFlako via flickr.

On July 24, 2013, the Houston Press published Wray’s 4,800-word article in which she details the ordeal Alaniz went through and how district court records showed similar cases that Memorial Hermann brought against uninsured patients. When she asked for a comment, a hospital spokesman explained that the facility treats more uninsured patients than any another hospital in Houston and donated more than $400 million in medical care annually. But the hospital did not see any contradiction in being a nonprofit facility and a debt collector.

Wray’s article is a good place to start for anyone covering how nonprofit and public hospitals are suing the uninsured and other patients with few resources to pay for expensive medical care.

For another example of how to cover this topic, the work of journalists Paul Kiel of ProPublica and Chris Arnold of NPR reported in December that nonprofit hospitals are required to offer discounted care to the poor but nonetheless often sue low-income patients. In doing so, they frequently garnish portions of their paychecks, they reported in, “From the E.R. to the Courtroom: How Nonprofit Hospitals are Seizing Patients’ Wages.

“No one tracks how many hospitals sue their patients and how frequently, but ProPublica and NPR found hospitals that routinely did so in Kansas, Oklahoma, Nebraska, and Alabama, as well as Missouri,” wrote Kiel and Arnold. “The number of suits is clearly in the tens of thousands annually. In Missouri alone, hospitals and debt collection firms working for them filed more than 15,000 suits in 2013.”

Kiel followed up the reporting on nonprofit hospitals with a similar article about public hospitals that were suing patients who had trouble paying their bills even though public hospitals often serve as facilities of last resort for the poor. In his article, “In Alabama, a Public Hospital Serves the Poor — With Lawsuits,” he wrote that about 20 percent of U.S. hospitals are public facilities that must provide care to those who can’t get care anywhere else.

In her “How I did it” article, Wray explains that, as Kiel and Arnold did, she pored over court records to get an idea about how many hospitals were suing patients and how many cases Memorial Hermann brought. Read her piece for more about how she reported the story.


3 thoughts on “Reporter finds nonprofit hospital’s suit against uninsured patient was just one of many

  1. Avatar photoDan Keller

    “Non-profit” is a tax status that has certain requirements to maintain. It does not mean that the hospital is required to write off all debt.
    Dianna Wray’s article was excellent. However, I think one thing she should have explored is why hospitals sue patients for amounts that they know can never be collected. The very high charges most likely come from the chargemaster — the complete list of a hospital’s billable items. However, this list consists of very high charges and is a starting point for negotiations between the hospital and payers, whether insurance companies or individual’s. Hospitals are critically concerned with cash flow and will negotiate. Do they sue for the full amount as leverage to get patients to negotiate and settle for a lesser agreed upon amount? Additionally, if the hospital is willing to accept a lower amount in a settlement, does it write off the remainder as “donated care,” eg, in the case of Memorial Hermann, is the more than $400 million that it touts as donated care really made up in large part by the (inflated chargemaster) amount it has not been paid? That is an amount that never would have even been charged if the patient had had private health insurance, Medicare, or Medicaid. In essence, is a hospital’s non-profit, tax exempt status based in somewhat large measure by fictitious charity care?

  2. Avatar photoNorman Bauman

    That’s a great story. Basically Dianna Wray learned everything she could about the health care system, read court documents, and talked to the lawyers (as well as the patients). Lawyers are great sources. They do exhaustive research. I like the way the hospital sued the patients, and then said they couldn’t talk about pending litigation.

    Before Murdoch, The Wall Street Journal also had a series of stories about people who were hit with overwhelming medical costs that they could never afford to pay. The great part was when the reporter called the hospital and the hospital said, “Oh, it’s all a mistake, we’ll write the bill off.” (I guess that’s not Memorial Hermann’s style.) The hospitals assigned cases to law firms who used collection tactics that were frequently illegal, like pursuing collections after the statute of limitations had expired, or garnisheeing bank accounts that contain Social Security payments. I found a few with a Google search. These were done by Lucette Lagnado, who had Hodgkin’s lymphoma herself as a child. So maybe that gave her some sympathy with the patients.
    Jeanette White Is Long Dead But Her Hospital Bill Lives On
    By Lucette Lagnado
    The Wall Street Journal
    March 13, 2003
    After 20 Years and $16,000, A Hospital Debt Is Canceled
    Quinton White Gets New-Found Freedom From Crushing, 20-Year Debt to Hospital
    By Lucette Lagnado
    The Wall Street Journal
    April 1, 2003
    One Critical Appendectomy Later, Young Woman Has a $19,000 Debt
    Ms. Nix Confronts Facts of Health-Care: The Uninsured Are Billed Sharply More
    By Lucette Lagnado
    The Wall Street Journal
    March 17, 2003
    Uninsured and Ill, a Woman Is Forced to Ration Her Care
    By Lucette Lagnado
    The Wall Street Journal
    November 12, 2002

    This is one of the worst stories. A 23-year-old woman with glaucoma lost one eye, and was losing the second eye, because she couldn’t afford $250 a month for glaucoma medication. I used to write about glaucoma medication for ophthalmology magazines. It’s enough to make you despair that an effective medication is available to save her eyesight but she can’t get it because of the cost.

  3. Pingback: You Have Been Sued In A Court Of Law |

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