Nonprofit hospitals more likely to garnish patient wages to pay medical bills

Hospitals are using increasingly aggressive strategies to collect medical debt from patients, including garnishing wages or savings from patient bank accounts.

Research published June 25 in JAMA shows 36 percent of hospitals in Virginia garnished patient wages to collect payment for medical bills in 2017. Most of the hospitals that garnished wages (71 percent) were nonprofit.

Researchers note their findings "suggest hospitals with greater financial need (nonprofit, lower annual gross revenue) may be pursuing debt collection to the final stage of garnishment." Those that garnished wages recorded average annual gross revenue of $806 million and garnished an average of $722,342 in wages, or $2,783 per patient.

The findings were also featured in the pages of The Wall Street Journal. The report notes the issue of nonprofits suing patients over medical debt is not unique to Virginia. Hospitals in Arizona have gone to court over claims to patient personal-injury settlements, for example. Johns Hopkins Hospital in Baltimore also faces a similar issue — a coalition of citizens and unions presented hospital leadership with a petition to drop medical debt lawsuits against patients last week.

Read the WSJ article here and find the JAMA study here.


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