The state of Missouri is now the poster child for states that have not expanded Medicaid due to a great story published by Pro-Publica and National Public Radio. And within the state of Missouri, ground zero is St. Joseph, Missouri, located in Buchanan County, Missouri.
St. Joseph, Missouri is a small town located north of Kansas City, and lies right at the border with the state of Kansas. It's a small town of 77,000 people, in a county with about 90,000, but it has become ground zero for the fight to expand Medicaid.
St. Joseph's, Missouri has one hospital that serves the area, Heartland Regional Medical Center, but the nonprofit hospital and its system of clinics across the county recently re-branded itself and it's now called Mosaic Life Care, because, their promotional materials say: "We offer much more than health care. We offer life care."
But just a couple of miles away, housed is a key piece of Mosaic's dirty little secret - Heartland's very own for-profit debt collection agency, Northwest Financial Services. What a surprise, right? Yup, Mosaic is a so called "non-profit" hospital, but they have set up a separate entity to harass and garnish wages of the poor and working class residents in and around St. Joseph's who make little money or sue them in Buchanan County Superior Court.
So you can only imagine what Northwest is up to:
When patients receive care at Heartland and don't or can't pay, their bills often end up here at Northwest Financial Services. And if those patients don't meet Northwest's demands, their debts can make another, final stop: the Buchanan County Courthouse.
From 2009 through 2013, Northwest filed more than 11,000 lawsuits. When it secured a judgment, as it typically did, Northwest was entitled to seize a hefty portion of a debtor's paycheck. During those years, the company garnished the pay of about 6,000 people and seized at least $12 million—an average of about $2,000 each, according to a ProPublica analysis of state court data.
Many were uninsured Heartland patients who were eligible for financial aid that would have eliminated or drastically cut their bills. Instead, they were charged full price for their care, without the deep discounts negotiated by insurers, according to court records, interviews and data provided by Heartland. No other Missouri hospital sued more of its patients.
And who are the people getting the Shaft? Blue collar workers, Walmart cashiers, nursing home aides, clerical staffers—the same types of patients all over this country who have always been the most vulnerable to unexpected debt. They work full time, but can't afford health insurance but they're not poor enough for Medicaid. And even though the Affordable Care Act has now been around for a couple of years, there are still close to 30 million Americans who are still uninsured because of states like like Missouri that have still not expanded Medicaid to cover more of the poor.
Recently, ProPublica and NPR reported that the wages of millions of U.S. workers across this country, many of them working class and lower middle class, are diverted to pay off a variety of consumer debts. And of course, a lot of this is debt is related to medical bills. And states like Missouri allow creditors to take a quarter of after-tax wages to pay off that debt, an amount that federal government surveys show is unaffordable for lower-income families.
Wage garnishment is crippling many of these low income families, but hospitals are also suing their patients in states like Missouri:
Consumer advocates say the laws governing wage garnishment are outdated and overly punitive, regardless of the debt's source. But the consequences are especially dire when garnishment is used to collect unavoidable health care bills—with interest and legal fees piled on.
No one tracks how many hospitals sue their patients and how frequently, but ProPublica and NPR found hospitals that routinely did so in Kansas, Oklahoma, Nebraska, and Alabama, as well as Missouri. The number of suits is clearly in the tens of thousands annually. In Missouri alone, hospitals and debt collection firms working for them filed more than 15,000 suits in 2013.
In Missouri, just a few hospitals, with Heartland leading the pack, accounted for an outsized portion of suits. But many others, including the state's largest hospital, rarely, if ever, sued their patients over outstanding medical bills.
Heartland's aggressive collections tactics through Northwest Financial Services aren't because the hospital is struggling financially. Heartland reported a $45 million profit in 2013, according to its annual report, despite the fact that it operates in an economically struggling county of just 90,000.
And it gets worse - as a nonprofit, Heartland doesn't pay any state income taxes or property taxes on the land it owns. In exchange for these tax breaks, it is expected to provide a benefit to the community—most crucially by providing care to lower income patients who can't afford to pay. Tama Wagner, the hospital's chief brand officer who is paid 1.2 million dollars a year, said the hospital does everything it can to fulfill that mission - but of course, we all no that Tama Wagner is full of shit.
Wagner says that patients are offered multiple opportunities to qualify for financial assistance and avoid the possibility of legal action, she said, adding that it's better for everyone "if we attempt to work on things before it gets to this level."
But if patients don't utilize those resources, she said, the hospital must take action. "No one goes into this with the goal or the desire to ruin someone's life," she said. "But at the same time, the services were rendered, and we have to figure out how to get them paid for."
Asked why the hospital sues more patients than any other in the state, Wagner said, "I don't know."
She doesn't know! What a surprise!
In the meantime, consumer activists have been quite forceful in speaking out against these aggressive and immoral collections actions:
C
hi Chi Wu, an attorney with the National Consumer Law Center, said Heartland's tactics ran counter to its mission. Nonprofit hospitals are given tax-exempt status "because they are supposed to be serving the public and especially the poor," she said.
But if hospitals are charging low-income, uninsured patients "even more and then garnishing their wages on the basis of these inflated amounts," there ought to be consequences, she said. "They should lose their tax-exempt status."
The center has recommended that federal regulators prohibit debt collectors from garnishing wages based on the high prices hospitals charge uninsured patients.
So, who are these people who are getting the shaft from Heartland?
Well, meet Keith and Katie Herie. Northwest first sued Keith and Katie Herie when they couldn't afford to pay the $14,000 bill for Katie's emergency appendectomy. While Northwest was garnishing Keith Heries' pay for that suit, it sued him again over another hospital visit. Since 2006, the Heries have paid almost $20,000 and still owe at least another $26,000, with interest continuing to accrue. But it looks like the Herie's story is forcing the hospital to take a second look at its debt collection practices:
ProPublica and NPR shared Herie's case and other findings with Heartland's board of trustees, which is now reviewing the hospital's debt collection practices.
"Make it so people can make a dent in it," said Herie, 51, a drill operator. "There's a lot of people who want to be able to pay their medical bills...But they're not going to jeopardize their household for it."
Northwest won judgments in 77 percent of its cases in 2013, because in most cases, defendants didn't show up. Only 3 percent of those sued had an attorney - no surprise there. And all of the judgments tacked on a whopping 9 percent interest rate to the debt, which is the highest amount allowed under the laws of the state of Missouri. 9%!!
Some former patients agree to payment plans to avoid wag garnishments, but since Northwest requires these arrangements to be renegotiated or paid "in full" after six months, the plans are not a guaranteed reprieve from future court action, which than just piles on more fees. What a racket.
Nationally, 60% of all hospitals are non-profit (who knew?) and many of them have a long history of aggressive debt collection. Several faced lawsuits back in the early 2000s challenging their tax exempt status based on their aggressive collections tactics. The Wall Street Journal ran a series of articles back in 2003 that did a great job detailing and exposing the frequent use of garnishments and lawsuits by hospitals such as prestigious Yale-New Haven Hospital.
"When the public saw that, they were shocked," said Rick Wade, then the spokesman for the American Hospital Association.
The AHA asked its members to review their debt collection policies. Many hospital executives were surprised by what they found and decided to revamp their practices, Wade said.
A handful of states subsequently passed laws either restricting how nonprofit hospitals can collect on debts or dictating how much financial assistance they must provide.
But in most states, there are no clear guidelines, and over time, public scrutiny has faded, said Nancy Kane, a professor with Harvard's School of Public Health. "Hospitals are not looking for opportunities to give away charity care."
The collection tactics of these non-profit hospitals like Heartland are appalling. Even with the Affordable Care Act in place, there are still tens of millions of people in states like Missouri where Medicaid expansion is still not a reality. That is why it is important to keep fighting the good fight in these states and to bring stories to light such as this one involving Heartland. While states like Tennessee and Alabama are showing signs that they may, in the near future, expand Medicare, the fight needs to continue.
I urge everyone to read the entire article about Heartland. There is so much to this story that I simply couldn't fit into this diary and some of the personal stories contained in the article are compelling and give you a good sense of the horrible circumstances that some are dealing with.
And a big shout out to ProPublica and NPR for casting light on this issue - it was long overdue.
You can read or listen to the story here:
http://www.npr.org/...