Can the US federal government stop private hospitals from suing?
May 21, 2021 8:04 AM   Subscribe

So i was reading this article about a private hospital in the US suing people for unpaid debts that they cannot possibly pay. And I was thinking, the federal government should just say any hospital receiving federal money cannot do this. That's how Title IX works for universities, right? Could they do this?

My understanding is that the reason Title IX applies to private universities is that they receive federal money. And I was thinking hospitals, do too, right? I mean medicare is federal, NIH and NSF grants for researchers are federal, I think subsidies paid for ObamaCare are federal (though funnelled through states, so maybe complicated). I bet there are other things, too.

It seems like the federal government could just say that hospitals that file lawsuits for unpaid dept or otherwise collect aggressively and who do not proactively give debtors information on their options are not eligible to receive federal funds.

I can't imagine a hospital that can't take medicare patients could keep the lights on very long, and good luck keeping top doctors if those doctors aren't eligible for NIH or NSF research grants. Right?

Am I missing something other than political will?
posted by If only I had a penguin... to Law & Government (7 answers total) 1 user marked this as a favorite
 
You could almost certainly pass a law under the commerce clause powers doing this; you wouldn't need to limit it to hospitals receiving federal funds. There's a federal bankruptcy law, for example.

It'd need to be a law though. You couldn't do it (even if limited to hospitals getting funding) with an executive order.
posted by mark k at 8:40 AM on May 21


A grab bag of thoughts:
*State Medicaid programs are a big safety net for those who cannot afford commercial coverage - I'm not familiar with every state, but I assume that most states prevent patient cost-sharing after Medicaid pays their part (and they are always the payer of last resort)
*Many states already have laws that govern hospitals providing charity care for those who cannot afford it
*Why should hospitals, the caregivers, be the ones taking the loss here? Make the for-profit insurance companies that pay a little and pass huge patient responsibilities onto their patients eat the cost! Why are we allowing plans on the market with huge (five-figure!) deductibles without the plan being required to assure that's something the patient could actually afford if it came to that?
posted by ThePinkSuperhero at 8:59 AM on May 21 [2 favorites]


In NYS, the two unions that donate the most to politicians are the teachers (#2) and the medical (Hospitals, Nurses, etc #1). While I do not know for a fact, I am sure that both unions donate a lot of money in other states and to federal politicians. That is one strike against ever passing a law like you propose.

Medicare/Medicaid is not a direct grant to hospitals. It is government insurance. It is paid for care on an individual case basis. Same with insurance subsidies. As for NIH grants, I guess it would depend on if the grants are made to the hospital or to doctors doing research in the hospital. From the hospital standpoint, if it is a for profit hospital, they might make the decision to forgo grants if they cannot pursue debt collection. Depends on the amounts of the grants versus the amount of the debts.

Suing for debts is different than collecting the debt. First, not everyone who does not pay is not paying because they are broke. Second, for tax and accounting purposes, the hospitals might need a judgement to write off the debt knowing that they will never collect even with a judgement. Third, if a hospital cannot collect a fee for services rendered, then they are unlikely to be able to pay their own payables.

What are the downsides to a patient who owes money to the hospital to declaring bankruptcy? Generally, bankruptcy wrecks your credit for 7 years and prevents one from getting more credit. Well, if you cannot pay your hospital bill, then you are unlikely to have "good" credit or to be getting loans, mortgages, and credit cards anyway. So, the hospital sues, the patient declares bankruptcy and never pays while the hospital can then write off the debt as uncollectable.

What you are proposing is essentially government insurance for all. That is not likely to pass as a law yet. I think it is getting closer to reality, but not there yet. The problem is not the real poor. It is with the working class poor. The person who has a job, can pay their bills, but have no savings whatsoever. They get hit with an unanticipated large bill and it essentially bankrupts them. The issue to me is the rates charged for hospital procedures and hospital stays.

What I think should happen immediately is that hospitals and doctors charge self paying patients the same rates as their medicare/medicaid reimbursement rate. When a Hospital bills Medicare let's say $50,000, medicare probably only pays less than 10% of that. When an uninsured or under insured middle class person has to go to the hospital, instead of billing them some fictitious rate and suing for it, bill them at the rate billed to the various insurance companies and they will probably collect more.

Anecdotally, I have a friend who has been a neurosurgeon for 20 years. His group has not raised its rates for at least 10 years because they are only going to collect what the insurance company pays and the amount collected from self pay is like 10 cents on the dollar. The hospitals and doctors are in a way subsidizing health care. I can tell you that my friend is looking for ways he can still be a doctor without seeing patients. That sounds like on oxymoron, but he would rather find a salary, even a lower salary than he makes now than deal with insurance billing, turning debts over to collectors or the courts or fighting with the insurance companies. He just wants to serve people.

If you take away the hospital's ability to sue or to collect a debt, who would ever pay their hospital bill? Very few if they are acting economically rational. That would lead to a national health plan.

The system is broken. The problem is that there is no clear cut solution that would appease the various interest groups. The middle class working person is caught in the crossfire.
posted by AugustWest at 9:21 AM on May 21 [1 favorite]


In general, the US government has not acted on any efforts to make the health care system better for people. The ACA had a fair bit of cost-cutting (profit-reducing) elements that were challenged by the GOP in court and never implemented. It will be broken as long as it's profitable.
posted by theora55 at 9:26 AM on May 21 [1 favorite]


Response by poster: the two unions that donate the most to politicians are the teachers (#2) and the medical (Hospitals, Nurses, etc #1). While I do not know for a fact, I am sure that both unions donate a lot of money in other states and to federal politicians. That is one strike against ever passing a law like you propose.

I would have guessed healthcare workers would be the people who cared most about ensuring equitable access since they're the people who see the results of inequity and (in the case of doctors) would rather treat the more serious and more interesting cases, not the ones who have the correctly-affiliated insurance.

Medicare/Medicaid is not a direct grant to hospitals. It is government insurance.
I understand that. If you said that people with medicare and medicaid were insured for services at hospitals that did not aggressively collect debts, it would be a huge sacrifice for hospitals to sue people for a few thousand dollars and give up EVERY medicare and medicaid patient, I would think.

As for NIH grants, I guess it would depend on if the grants are made to the hospital or to doctors doing research in the hospital. From the hospital standpoint, if it is a for profit hospital, they might make the decision to forgo grants if they cannot pursue debt collection. Depends on the amounts of the grants versus the amount of the debts.

Grants of that type can only go through eligible institutions. You can't really be self-employed an apply for a research grant just to do your own personal project, even if you have the skills and resources to do the project. In some senses they go to individuals -- it is individual doctors who apply -- but it is then the institution that receives, and administers the money. Anyway, the key thing here is that grants of this type come with "overhead", usually in the neighbourhood of 20% which is money that goes to the institution. So if a doctor receives a 500K grant, the hospital gets $100k on top of that. Also, some grants come with salary support -- so the grant pays the doctors salary (or some portion of it) which means the hospital gets to keep some of the doctor's salary (this is complicated because some people are basically required to find grants for their salaries, so the hospital never going to pay it, regardless).

But regardless, my assumption about how this would work would be that hospitals would know that if they just decided to forego grants (and medicare patients, and any other federal moneys) that big name doctor researchers working at those hospitals would by pretty damn unhappy that they couldn't get grants and would start looking for jobs at hospitals where they COULD get grants.

But yes, why should the hospital eat the cost? Well I suppose that's a fair point, though I'm not personally inclined to sympathize with hospitals operating for profit, I can't think of any actual reason why it's somehow fair for them to eat the costs other than a general sense of "Cost of doing business."
posted by If only I had a penguin... at 10:19 AM on May 21


In the other direction, the federal government has laws that make it very difficult to discharge student loan debt when declaring bankruptcy. You have to go through the process of declaring bankruptcy and you have to demonstrate to the court that repayment would cause undue hardship.

Since medical debt is a statistically significant cause of bankruptcy, narrowing the scope of collections here would definitely be an avenue for a sensible government to explore.

Using federal monies to guide behavior by grant recipients, that might be trickier, but this is not impossible. There are various kinds of scientific research that cannot be funded with federal grants, for instance. This does not necessarily have be done with Congressional approval; presidents of the recent age have applied and removed restrictions on use of fetal tissue in federally-funded research, for instance. Laws tend to last longer than presidencies, however.

Nonetheless, the government can and does categorize different types of financial obligations and what rules regulate them, even if people might have to go to a courtroom and go through the process of saying what can and cannot be paid. So classifying medical debt as unique for legal purposes might be one avenue for circumventing opposition to a national health insurance program.
posted by They sucked his brains out! at 11:09 AM on May 21


Best answer: Answering your question very narrowly: yes, the federal government does hypothetically have some policy levers they could use to force hospitals to change behavior as a requirement for continuing to receive federal funds. There is precedent for this, as Medicare (the national coverage program for Americans over age 65 or who are permanently disabled) required hospitals to desegregate as a condition for being "Medicare-certified" (aka, able to bill Medicare) and it pretty much immediately ended segregation in hospitals when it was passed in the 1960s.

More info on that here.

Others have noted above why the federal government is unlikely to do this - I agree that it is the sort of policy that would be likely to have unintended consequences, and there are a lot of strong political constituencies that could probably argue persuasively that it's not hospitals that should take it on the chin when patients have inadequate insurance coverage. So I'd say yes it's hypothetically possible for the federal government to do this but probably vanishingly likely that it would ever be seriously considered and implemented.
posted by iminurmefi at 11:49 AM on May 21


« Older Last book you loved?   |   Sofa bed without the bed Newer »

You are not logged in, either login or create an account to post comments