Duke Law researchers: NC hospitals use deceit to sue patients, take their homes | Opinion
Recently, in partnership with the office of State Treasurer Dale Folwell, we released a study reporting that North Carolina hospitals sued 7,517 patients to collect medical debt. Many of these suits, filed between 2017-2022, resulted in default judgments without patients’ knowledge, generated millions of dollars in additional interest charges, and placed liens against patients’ homes.
The report included firsthand accounts: A couple in their 80s didn’t know of a $90,000 lien against their house until contacted by researchers. A couple in their 70s said the hospital promised them charity care before putting a $192,000 lien against their home, $100,000 of which was due to interest fees.
Our study also found that only a handful of hospitals were responsible for these lawsuits. Just five hospital systems filed over 95% of the suits, and over 40% — by far the highest statewide — were brought by Atrium Health, the Charlotte-based system which is now part of Advocate Health, the third-largest nonprofit health system in the nation.
The day our report was released, Atrium issued a statement saying, “as a current practice, Atrium Health does not file any lawsuits against patients, nor do we execute on any liens or foreclose on property that were filed previously.”
At first, we interpreted this as a challenge to our scholarly integrity. Then, we realized the statement’s truth depends on what the meaning of the word “does” is. Atrium was evidently claiming that it discontinued its aggressive debt collection in N.C. courts at some point after 2022.
Subsequent investigation suggests that, however parsed, the statement is problematic. Atrium has not forgiven the debt of thousands of patients, and it collected on a lien against a patients’ home as recently as July 2023.
Worse, is that the statement suggests that Atrium prioritizes public relations over substance. Honesty is a prerequisite to developing good healthcare policy, and many of North Carolina’s policies are premised on the good faith and community commitment of the state’s healthcare providers. That is why nonprofit hospitals are tax exempt, why state insurance programs partner with hospitals, and why the state helps hospitals raise capital funds. In return, policymakers and citizens need truthfulness and candor from the state’s healthcare providers.
Honesty is also a critical ingredient to providing good healthcare. The doctor-patient relationship is founded on trust and mutual respect, but these lawsuits are eroding families’ trust in the entire healthcare system.
Sadly, our health system reflects multiple elements of deceit. Healthcare prices remain overwhelmingly hidden from patients, and several of the lawsuits we identified were products of surprise bills that infamously exploit patient vulnerability by charging exorbitant prices without disclosure.
The simple reality is that initiating lawsuits against patients inflicts additional harm. It damages patients’ creditworthiness and employment prospects. It deters them from seeking necessary healthcare and imposes anxiety that impedes physical recovery. Several cancer patients told us that the financial stress hurt their ability to battle their illness.
Placing liens on homes deprives families of their key assets and leads to inter-generational poverty. Were hospitals to adhere to the Hippocratic Oath to do no harm, they simply would not sue their patients in state courts.
Instead of modeling a commitment to community health and the integrity that warrants the tax breaks, subsidies and public investments that N.C. citizens provide, Atrium’s statement exhibited the handiwork of public relations teams trying to limit bad publicity. It showed callousness to the reality that patients and communities suffer when hospitals join with the powers of the court system to extract their remaining wealth.
North Carolina deserves and should expect far more — and the N.C. General Assembly has the capacity to start delivering. One immediate step would be to pass the Medical Debt De-Weaponization Act, which the N.C. Senate already unanimously passed. Lawmakers should also consider reforms to how hospitals use the court system and how state funds are used to deliver healthcare.
Barak Richman and Sara Sternberg Greene are professors at the Duke University School of Law.
