Commentary: Toxic medical billing practices must be curbed

A study this year by Patient Rights Advocate showed that, while federal law requires all hospitals to disclose their prices, 94.4% of hospitals are failing to post their prices online. According to the study, not a single acute-care hospital in Delaware was found to be in full compliance with the law. What results is unexpected billing to patients who are not readily able to pay the unanticipated fees, many times causing them to be sued by hospitals for unpaid debts.”

As the United States continues to emerge from the challenges posed by the pandemic, a critical issue looms over consumers and the health care system that darkens the lives of millions of Americans. Toxic billing practices are leading to bankruptcy for many Americans, who are often confronted with challenges in the U.S. courts, as hospital systems sue patients over their unpaid medical bills.

This issue has become so severe that many Americans even neglect seeking treatment for their pressing health issues because they fear the possibility of bankruptcy resulting from medical debts. Delaware’s minority communities are caught in this vicious cycle at disproportionately high rates, such that nearly 30% of members of Delaware’s communities of color are weighed down by medical debt in collection, in contrast to a national average of 17%.

In August, Credit Karma conducted a debt analysis of nearly 20 million Americans. The results of their study showed there is a total of $45 billion of medical debt in collections, averaging $2,200 of debt per person. Experts expect this figure to be even higher as the 180-day lag before unpaid medical debts can show up on consumers’ credit reports continues to understate the true extent of the problem.

Additionally, a survey conducted during the pandemic showed that 56% of U.S. adults had unpaid medical debts sent to collections, 5% of which owed more than $50,000. These statistics highlight just one aspect of the shocking reality of the U.S. health care system that needs to be addressed and resolved by policymakers.

The issue of toxic billing points to faulty collections practices of many hospital systems across the United States. A study this year by Patient Rights Advocate showed that, while federal law requires all hospitals to disclose their prices, 94.4% of hospitals are failing to post their prices online. According to the study, not a single acute-care hospital in Delaware was found to be in full compliance with the law. What results is unexpected billing to patients who are not readily able to pay the unanticipated fees, many times causing them to be sued by hospitals for unpaid debts.

According to The New York Times, one hospital system in Virginia and Tennessee has brought at least 44,000 lawsuits against patients since 2009. In many cases, these lawsuits are against lower- and middle-class families, who have insurance but also a high deductible, resulting in large bills they are unable to pay. According to the 2020 annual report of the Delaware Judiciary, consumer debt-collection cases constitute nearly 80% of civil cases in the state’s Court of Common Pleas.

At the same time, nearly twice as many minority households as White households lack insurance coverage. In state rankings, Delaware is ranked eighth when it comes to adults with unpaid medical bills. According to recent census data, 28% of Delawareans reported being burdened by medical debt. The census report highlights that, “Households that had trouble paying their rent or mortgage also appeared to have trouble paying medical bills and were more likely to carry a high medical debt burden relative to other households (12.4% versus 3.5%).” In other words, here, the correlation between the two phenomena is pronounced.

Toxic billing practices, medical-debt lawsuits and a lack of transparency are just some of the issues facing federal lawmakers in the pursuit to reform the U.S. health care system. There are many reforms that are being sought after by legislators, consumer advocates and even some hospitals themselves. A much-needed relief for many would include a cap on debt interest rates and making courts more accommodating to patients.

Delaware’s leaders must ensure that nonprofit hospitals are adequately supporting patients and transparency rules are being enforced. Health care providers should be regulated to cease toxic debt-collection practices, along with efforts to make sure that consumers are not being targeted with hidden fees or marked-up charges that make patient care unaffordable. All efforts at medical debt relief in the First State would be welcomed developments by so many Delawareans.

Rep. Kim Williams is a Democrat who serves the city of Newport.