Arkansas hospital accused of suing more than 8,000 patients, employees over medical debt

Little Rock-based University of Arkansas for Medical Sciences's debt collection lawsuits have skyrocketed since 2019 with more than 8,000 patients, including more than 500 of its staff, for unpaid medical debts, a CNN investigation found.

CNN said the university's use of court to collect debts leaped during the pandemic, going from about 35 lawsuits in 2016 to more than 3,000 in 2021. Most of the lawsuits filed were for debts of $1,000 or less, despite the university taking on hundreds in court filing fees, attorney fees and more. In thousands of cases, the university was allowed to garnish defendants' wages or bank accounts, leading to dramatic consequences for some, the report found.

Some patients and past or current employees who have been sued by the UAMS told CNN that they had to declare bankruptcy, take second jobs or cut down on food for their families in order to pay the bill.

Berneta Haynes, a lawyer with the National Consumer Law Center who has studied medical debt, told CNN that UAMS appeared to be using some of "the most egregious types of collections practices. Hounding people for money, wage garnishments, seizure of bank accounts, all over minimal amounts of money."

UAMS defended its collection practices and told Becker's they only collect on a very small percentage of patient visits, approximately 0.0013 percent, and never collect for patients on Medicaid or Medicare, unemployed patients or those below 200 percent of the federal poverty level. 

"Under our current billing methodology we will only take legal action after many months — typically 12 or more — of regularly communicating through letters and phone calls to those with the ability to pay, asking them to set up and follow a payment plan. Some of those have been as small as $5-$10 a month," Leslie Taylor, vice chancellor of communications and marketing, told Becker's. "We have a responsibility to our state, to taxpayers and to our 12,000 employees to seek reimbursement for our services from those who are employed, insured and have the ability to pay. … We believe our approach to billing and collections is designed to be fair and we adhere to the American Hospital Association guidelines."

The sudden increase in debt lawsuits could be connected to a 2019 partnership with debt collection firm Mid-South Adjustment Company, according to CNN. Court documents showed some of the lawsuits said bills should be paid to Mid-South, and most of the collection suits were represented by Mid-South's attorney, Brad Dowler. The collection agency has been paid more than $3.1 million by UAMS since the partnership.

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