Tighter hospital control sought

Lawmaker, judge look at ways to ease debt burden on poor

Sun Follow-up

December 24, 2008|By Fred Schulte and James Drew | Fred Schulte and James Drew,investigations@baltsun.com

State officials began looking yesterday into ways to tighten oversight of hospitals' charity care and debt- collection practices, ranging from new legislation to regulate hospital policies to new court procedures to help people sued over unpaid hospital bills.

Del. Peter A. Hammen, chairman of the House Health and Government Operations Committee, said he is drafting legislation to impose a statewide standard for providing free or reduced cost care to patients. These policies now vary widely among the state's 46 nonprofit hospitals, and the industry has resisted efforts to make them uniform. Debt collection tactics also vary widely.

"At the very least, we should recognize that people are not being treated fairly," said Hammen, a Baltimore Democrat. "And in a lot of cases, lives are being destroyed in terms of their ability to get jobs, to pay bills."

Hammen was responding to "In Their Debt," a Baltimore Sun investigative series that found that hospitals have filed more than 132,000 lawsuits against patients over the past five years, collected more than $100 million in judgments and imposed more than 8,000 property liens across the state.

These lawsuits have spiked sharply since 2003 despite a unique rate-setting system in Maryland, overseen by the state Health Services Cost Review Commission, that is intended to compensate hospitals for all unpaid bills and free care.

Hospitals collected about $921 million in these subsidies last year alone through the rates charged to all patients. Some hospitals that have made millions of dollars in surpluses from these payments have been among the most frequent filers of lawsuits against patients.

The Sun also found that hospitals have won judgments against some patients for balances they were not permitted to collect under state law or contracts with insurance companies.

Hammen said the bill would be drafted in January in consultation with Gov. Martin O'Malley's office and the state Senate. No decision has been made on what that minimum charity care standard would be, he said.

Meanwhile, the chief judge of Maryland's district courts said he has called a meeting of judges to examine whether the court process adequately protects the interests of people who owe hospital bills or other consumer debts, especially people who appear in court without lawyers.

"Sadly, a lot of people can't afford to get a lawyer," Chief Judge Ben C. Clyburn said yesterday. "We want people to walk away from the process with trust, and this would help build trust and confidence."

Possible solutions, he said, could include developing a video or having legal professionals explain the process, and helping people with any defenses they might have to contest bills.

State Sen. Brian E. Frosh, chairman of the Judiciary Committee, said hospitals like any other business need to collect money they are owed. But the Montgomery County Democrat said lawmakers must examine whether some hospitals have "gone overboard" in pursuing patients in court.

"I think the key question is the one raised in the articles, which is, 'Are they going after people they shouldn't be going after?' " Frosh said.

Each hospital in Maryland decides which patients should receive charity care and which are able to pay their bills. The Maryland Hospital Association said all of its members, at a minimum, offer free care to patients who have less than $10,000 in net assets and incomes below 150 percent of the federal poverty guidelines, set this year at about $33,300 for a family of four.

But those standards vary widely and are open to interpretation, and the hospital association has resisted efforts by Maryland lawmakers to standardize them or offer charity applications to all patients. A bill introduced in 2005, which would have made uninsured patients with income below 200 percent of the federal poverty level eligible, died in committee.

Hammen said his bill probably would require the state to monitor hospital collection practices. He said he will assemble a group that would include the cost review commission and the Maryland Hospital Association, the industry's trade group, to work on the legislation. Plans call for the legislation to be finished by the end of January, he said.

"The question is, 'Are the people receiving care benefiting from the system?' It is not about the hospitals. We want hospitals that are viable, that can invest in infrastructure, but we can't have those expenses paid for by the poor," Hammen said.

Separately, the Johns Hopkins Health System said it is studying its own procedures after acknowledging that it made an "administrative error" in the case of Willie Mae White, a housekeeper living on Social Security and food stamps who underwent emergency brain surgery at Johns Hopkins Bayview Medical Center in 2005.

White was sued over a $36,224 bill, even though the hospital had promised her that the bill would be forgiven at least in part under the charity care policy. She settled the suit by paying $500 right away and agreeing to pay $50 a month, a plan that would have taken the 66-year-old woman nearly six decades to repay. Hopkins dropped its case against White last week and paid her $2,207, representing the sum of installment payments she had made, plus interest.

Johns Hopkins, in a statement posted on its Web site, said that through an "oversight," hospital workers missed the fact that White had previously been approved for charity care at another Hopkins hospital.

"While these mistakes are rare, we take them seriously and are currently exploring ways to prevent their recurrence," the hospital statement reads.

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