A study found that some hospitals frequently sued patients for medical debt over a 15-year period, although some providers say billing practices have changed.
A small number of Virginia hospitals and law firms filed more than a million lawsuits for medical debt between 2010 and 2024, imposing financial hardship on hundreds of thousands of patients, according to a report released on March 26.
Researchers from Stanford University’s Clinical Excellence Research Center, George Washington University Law School, and Patient Rights Advocate examined 15 years’ worth of civil lawsuits and reported that a “medical debt ecosystem” in the commonwealth leaves unwary patients in a state of poverty and poor health.
Some hospitals dispute the findings, saying they are misleading and do not reflect recently passed consumer protection laws or changed practices within the medical community.
The Debt Trap
More than 100 million Americans collectively have some $200 billion in medical debt, and many of those patients face lawsuits from their providers when they are unable to pay.
Medical debt begins with unclear pricing, according to the report’s authors, who said patients are often asked to enter financial agreements that obligate them to unspecified costs.
And the prices sometimes vary widely from patient to patient, the report stated. In one case, a service ranged from about $1,600 to more than $121,000 in hospitals within the same health system.
Hospitals and other medical providers in Virginia brought nearly 1.2 million court actions against patients during the 15-year period studied in the report, seeking to collect $1.4 billion. That represented 27 percent of all debt collection lawsuits in the state, the report stated.
Ten health care providers accounted for nearly half (48 percent) of those court actions.
Previous studies have indicated an increase in medical debt collection in the 2010s.
“A highly lucrative industry is capitalizing on patients’ inability to pay,” Noam N. Levy wrote in an article for the health industry research group KFF in 2022.
Virginia passed a price transparency law in 2016 and another to combat surprise medical bills in 2020.
The commonwealth launched a public awareness campaign in 2023 to inform the public about these laws, and it maintains a web-based price transparency tool for patients.
