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NY Times, Sept. 3, 2019
The Hospital Treated These Patients. Then It Sued Them.
By Laura Beil
CARLSBAD, N.M. — The first time Carlsbad Medical Center sued Misti
Price, she was newly divorced and working two jobs to support her three
The hospital demanded payment in 2012 for what Ms. Price recalled as an
emergency room visit for one of her children who has asthma. She could
not afford a lawyer, and she did not have the money to pay the bill.
Ms. Price let the summons go unanswered, figuring she would settle the
balance — with interest, about $3,600 — when she could. A few months
later, she opened her paycheck and discovered the hospital had garnished
her wages by $870 a month.
Her car was soon repossessed because she could no longer make the
payments. She was on the verge of losing her house, too, when her
mortgage company stepped in to help her save it.
“I was going to let it go,” Ms. Price said, tearing up recently in an
interview at the Carlsbad Public Library. “It was tough.”
And it was only the beginning. Ms. Price, 40, a nurse and local 4-H
leader, has been sued five times by Carlsbad Medical Center, for bills
totaling more than $17,000.
It’s not because she and her children are uninsured; according to the
hospital, the charges are what she owed after her insurer had paid. But
Ms. Price said she had never received an itemized bill outlining exactly
what she owed money for. The collection agency wanted the balance in
full, and she was not able to work out a payment plan until after she
In this town, she has a lot of company.
An examination of court records by The New York Times found almost 3,000
lawsuits filed by Carlsbad Medical Center against patients over medical
debt since 2015, more than 500 of them through August of this year
alone. Few hospitals sue so many patients so often.
Ms. Price’s sister, a police dispatcher, has been sued twice. Her
husband has been sued. The county judge who hears many of these cases
was once sued, too.
Carlsbad Medical Center is not the only hospital to have filed reams of
lawsuits over unpaid bills. In Memphis, Methodist Le Bonheur Healthcare,
a nonprofit hospital, filed 8,300 lawsuits from 2014 through 2018,
including some against its own employees, according to an investigation
by the journalism nonprofit groups ProPublica and MLK50.
In Virginia, hospitals filed more than 20,000 lawsuits over patient debt
in 2017 alone, according to a study by researchers at Johns Hopkins
University. Just five hospitals accounted for half of the resulting wage
garnishments in the state.
People across the country are coping with soaring medical costs, opaque
pricing and surprise bills, but these issues are felt acutely in
one-hospital towns like Carlsbad, where residents have few options for
care — and must pay whatever prices the hospital sets.
“Hospitals that have little competition can negotiate higher rates,
because the insurer wants that hospital in their network,” said Sara
Collins of the nonprofit Commonwealth Fund. Patient deductibles, which
must be paid out of pocket, are rising for almost everyone, she added.
Nationally, more than one in four consumers in 2018 were reported to
credit bureaus over unpaid debt, according to the Consumer Credit
Protection Bureau. More than half of those reports involved medical
bills. One survey of women with breast cancer found that a third of
those with health insurance had been referred to bill collectors; among
those without insurance, the number rose to 77 percent.
People confronted with medical debt typically drain their savings, the
Commonwealth Fund has found, and 43 percent said it lowered their credit
rating, suggesting that many of these consumers were reported to
Melissa Suggs, a spokeswoman for Carlsbad Medical Center, declined
requests for interviews about the hospital’s debt collection practices.
“The majority of accounts from which we seek to collect payment are
patients with insurance who have not fulfilled their deductible,
co-payment, or coinsurance responsibility set by their health insurance
plan — and who have chosen not to enter into a payment arrangement for
those amounts,” the hospital said in a written statement.
Following inquiries from The New York Times, the hospital said on Friday
that it would no longer sue patients whose incomes are below 150 percent
of the federal poverty level (roughly $19,000 for a single person),
whether they have insurance or not, and would release current court
judgments against any such patients.
Uninsured patients will now receive “discounts” that will bring down
their bills roughly to Medicaid reimbursement rates, the hospital said.
New Mexico expanded Medicaid enrollment under the Affordable Care Act in
2014, and most of these patients qualify for coverage. The state is now
considering a Medicaid “buy-in” option that would further expand coverage.
Liens and garnished wages
A small, sun-baked town once known mostly for its nearby caverns,
Carlsbad’s population has ballooned in recent years with an influx of
workers drilling and fracking in the oil-rich Permian Basin.
The town’s sole hospital, Carlsbad Medical Center has long faced
criticism from community leaders for high prices.
In 2013, officials of Carlsbad, which is self-insured, formed a task
force called the Mayor’s Hospital Reform Committee to address the strain
on its budget over health care costs for city employees. Administrators
considered sending employees to neighboring towns for care before they
were able to negotiate lower rates for key services.
In a presentation to the state legislature in 2015, the mining company
Intrepid Potash, a major employer in Carlsbad, calculated that it would
be cheaper for one of its workers to travel to Hawaii for a gall bladder
operation — including airfare for two, and a seven-day island cruise —
than to get the procedure at the local hospital. The company still
encourages employees to seek care out of town when possible.
In May, a nationwide survey by the RAND Corporation found that private
insurers paid Carlsbad Medical Center five times more than Medicare
would have paid for the same services — about twice the figure in the
Carlsbad Medical Center is owned by Community Health Systems, a chain of
hospitals based in Franklin, Tenn. An investigation in 2014 by the Santa
Fe New Mexican newspaper found that the three hospitals charging the
highest prices in the state were all owned by that chain.
In 2015, the company paid $98 million to the federal government to
settle charges that it had inflated revenue by admitting patients
unnecessarily. Community Health Systems admitted no wrongdoing.
In 2018, a unit of the company agreed to pay $260 million to settle
charges, brought by the Department of Justice, that it had
systematically overbilled for emergency room visits. Company officials
noted that the fraud occurred before C.H.S. bought the subsidiary.
There are alternative hospitals near Carlsbad, but the closest is more
than 40 minutes away, in the town of Artesia — which residents may find
too far to drive to in an emergency. One of Ms. Price’s bills followed
an emergency room visit after her daughter broke her arm on the soccer
“When your kid’s in pain, it’s hard to wait 45 minutes to get them
there,” she said.
Victoria Pina, 38, an instructional aide who lives in nearby Loving,
N.M., visited the Carlsbad Medical Center emergency room several times
for a shoulder that repeatedly dislocated.
“For me to be driving over 45 minutes to an hour to Artesia, I can’t
make it,” she said.
She’s been sued three times by Carlsbad Medical Center over E.R. bills.
After the first suit, she tried to call a number listed on the paperwork
to work out payments, but said she never got a return call.
The hospital attempted to garnish her wages, and then placed liens on
her home totaling more than $9,000. She and her husband discovered the
liens recently when they attempted to refinance their mortgage to a
lower interest rate.
Had they been able to lower their house payment, they could have put
aside the money to pay the hospital bill, she said. “But because of the
lien on the property, we can’t bring our house payment down,” she added.
“And that’s hard.”
If Ms. Pina had gone to another hospital nearby, she likely would have
escaped a lawsuit. Lovelace Regional Hospital in Roswell, just over an
hour away, has filed about two dozen suits over patient debts since 2015.
Artesia General has no debt-collection suits against patients on record
since 2015. Neither does Presbyterian Hospital in Albuquerque — which,
at 450 licensed beds, is almost four times as large as the hospital in
By contrast, other hospitals owned by Community Health Systems in New
Mexico also regularly file suits over unpaid bills. Lea Regional Medical
Center in Hobbs has filed almost 2,000 such suits since 2015. Mountain
View Regional Medical Center in Las Cruces has filed about 2,000 suits
against patients in that time; almost half of them came just this year.
In Carlsbad, these lawsuits flood the docket. District Judge Lisa Riley,
who has been on the bench in Eddy County since 2011, estimated that
about one-third of all civil cases that come across her desk involve
unpaid medical debt.
The overwhelming majority of lawsuits simply go into default judgment,
she said, meaning that the defendants fail to respond — as was the
situation in Ms. Price’s first case — and the hospital proceeds to
“Out of those people who do respond, which is very few, the responses
almost always say, ‘I admit I owe the money and I’d like to make payment
arrangements,’ or ‘I can’t afford to pay it right now,’” Judge Riley
said. Hearings on the hospital cases are rare.
Hospital suits over unpaid debt are so frequent in Eddy County, “I had
no idea that it wasn’t common practice,” Judge Riley added. “I assumed
that all hospitals did that.”
She, too, was a target of the hospital before she became a judge. Her
husband had been disputing emergency room charges when the hospital
sued; the case was resolved and dismissed. (Judge Riley would not
comment further, citing ethics restrictions that prohibit judges from
making statements about matters that might appear in court.)
Judge Riley’s case and others from Carlsbad appear in an upcoming book
called “The Price We Pay,” by Dr. Marty Makary, a surgeon at Johns
Hopkins University who studies the costs of American health care and led
the study of hospital suits in Virginia.
Debt collection is common in the health care industry, he said, but
lawsuits are a traumatic way to force patients to pay. Normally
hospitals simply refer unpaid bills to debt collectors; fewer file
lawsuits and then garnish wages or place liens on homes.
In his study of Virginia, 36 percent of hospitals garnished the wages of
patients owing money, with 10 percent doing so frequently. (Even his own
institution, however, has come under fire for suing the poor.)
When seeking payment for medical bills, “Collections agencies may harass
you with phone calls,” Dr. Makary said. “They may send a note to your
credit bureau, but they’re not reaching into your paycheck.”
Many of these patients are low-paid workers with little savings. Dr.
Makary’s study found that Walmart was the most common employer of those
whose wages were garnished over medical bills. “These are hardworking
Americans who did nothing wrong,” he said.
The cost of care differs from institution to institution, partly because
hospitals have broad discretion in setting prices. Charges for the same
services vary widely, even when hospitals have similar patient
demographics, and the amounts billed have little relationship to quality.
If you are a hospital executive, “you could charge whatever you want,”
said Dr. Makary. “You could charge $1 million for an X-ray.”
What frustrates patients is the inability to find out prices until the
bill comes, even when they ask. “They say, ‘Oh, we can’t tell you until
insurance pays,” said Melissa Phillips, Ms. Price’s sister. “That’s the
answer. Or, ‘Depends what all we have to do.’”
Ms. Phillips, a police dispatcher who also has insurance, has been sued
twice over hospital bills. Her husband was sued once.
Carlsbad Medical Center does have a chargemaster of sticker prices
posted on its website. The charges are listed according to “service
code” — some clear, others less so.
“Blood transfusion” is listed at $1,303.58. A more cryptic “CC-RHC” is
listed at $53,711.62. But those prices differ from what patients
actually will be asked to pay. In a statement, the hospital claimed that
no patient actually pays the listed price.
In July, the Trump administration announced a proposed rule to require
hospitals to make public the prices negotiated with insurers.
The disclosure is an important first step, but will not necessarily keep
patients from amassing unanticipated debt, said Jack Hoadley, research
professor emeritus at the Georgetown University Health Policy Institute.
Patients are still responsible for co-pays and deductibles, and the
negotiated fee wouldn’t reflect extra payments for complications. “It
still doesn’t fully tell you what your out-of-pocket liability is going
to be,” he said.
Ms. Price’s insurance statements indicate that many of her bills have
come from high deductibles and some from out-of-network charges — even
though Carlsbad Medical Center is in network on her insurance.
Patients sometimes go to in-network hospitals for emergency care, but
don’t learn until they get the bill that some providers or services —
especially those in the emergency room — were actually out of network.
Across the country, these “surprise bills” have become such a problem
that many state legislatures have outlawed them.
New Mexico has such a law, but it does not go into effect until next
year, said John G. Franchini, the New Mexico insurance commissioner.
“Small hospitals cannot afford an emergency-room medical doctor,” he
said. “They can’t afford the full-time cost. This has become an abuse
because people also can’t afford to pay it.”
John Heaton, a retired pharmacist and former New Mexico state legislator
who lives in Carlsbad, worries that the hospital’s charges and
aggressive billing are driving patients into nearby towns whenever possible.
“When somebody goes out of town, that revenue is lost,” he said. “And
because it’s lost, the hospital has to charge everybody else more.”
Ms. Price remarried in 2017, and her husband has health insurance
through his job at an oil field supply company. His wages were garnished
last year by the hospital, the result of a lawsuit he does not remember
She no longer takes any chances. When she recently needed a mammogram,
she said, “I drove to Artesia.”
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