Northwell Health has vowed to stop suing patients over unpaid bills during the COVID-19 pandemic following a report that it sued thousands of patients last year.
Not-for-profit Northwell, New York state's biggest private hospital system, sued more than 2,500 patients last year, a New York Times investigation found. Over the same period, almost all other major private hospitals in the state voluntarily halted the practice after Gov. Andrew Cuomo ordered public hospitals to do so. Northwell has said it will drop those claims.
Suing over unpaid bills is an extreme practice that hospital leaders say they'd prefer to avoid, but some argue is necessary when patients don't meet their financial assistance criteria. There isn't much national data on how often it happens. Rather, such litigation commonly comes to light through media reports, such as the 2019 Kaiser Health News investigation that found UVA Health System in Charlottesville, Va., sued about 6,000 patients per year. That same year, Modern Healthcare reported that Ballad Health in Johnson City, Tenn., had filed about 5,700 lawsuits against patients in its first fiscal year as a health system.
In Northwell's case, spokesperson Barbara Osborn wrote in an email that 23-hospital Northwell paused legal filings from April through September, and has decided to extend that given the resurgence in COVID cases. That's in addition to rescinding any legal claims filed in 2020. The exception to the pause was Northwell's Mather Hospital in Port Jefferson, N.Y., which is not fully integrated into the system's revenue cycle system. That's being fixed, Osborn said.
"In the rare instances (less than 0.1 percent of claims) that Northwell is compelled to take legal action, it is only when a patient has been unresponsive to multiple attempts to resolve the outstanding balance and if it is determined that the patient has a strong ability to pay," Osborn said.
Northwell's financial assistance policy applies to patients with household incomes up to 500% of the federal poverty level, or $108,600 for a three-person household. That's more generous than New York state's requirement that hospitals provide discounted care to patients with incomes up to 300% of the federal poverty level.
Northwell's policy looks generous on its face, but much depends on how it's implemented, said Jenifer Bosco, a staff attorney with the National Consumer Law Center. She pointed out that Northwell's policy includes an asset test, which reduces access for many families.
"It doesn't seem like they're doing that much to go above and beyond and they're suing patients when the other hospitals in the state aren't in a state that was particularly hit hard by COVID," Bosco said. "That's not lost on anyone."
While some not-for-profit health systems—UPMC in Pittsburgh and Banner Health in Arizona, to name a few—managed to grow their margins in the first nine months of 2020, Northwell lost almost $247 million on operations in that time, a 2.6% loss margin. That's despite having recognized $892 million in federal coronavirus grants during that period.
On the other hand, the value of Northwell's cash, investments and cash equivalents grew to $7.8 billion in the first nine months of 2020, up 29% from the prior-year period.
A March 2020 Community Service Society report on lawsuits against patients by New York hospitals found that Northwell sued more patients than any other health system: almost 16,000 lawsuits between 2016 and 2019, or 51% of all lawsuits in its database.
