Aggressive Medical Debt Collection, Other Proposed Never Events

Hospitals work hard to avoid “never events,” or serious, largely preventable, and harmful events identified by the National Quality Forum (NQF). These never events include performing surgery on the wrong patient or accidentally leaving an item in a patient after an invasive procedure. However, some industry experts are now calling on the healthcare industry to consider a new set of never events that are administrative in nature, such as aggressive medical debt collection.

Dave A. Chokshi, MD, MSc, FACP, senior scholar at CUNY School of Public Health and Health Policy and former Commissioner at the New York City Department of Health and Mental Hygiene, and Adam L. Beckman, BS, of Harvard’s Medical and Business Schools, identify five new hospital never events in a new JAMA Health Forum article. They say that hospitals should never:

1. Aggressively pursue medical debt against patients who cannot afford their bills
2. Spend less on community benefits than it earns in tax breaks from non-profit status
3. Flout federal requirements for hospitals to be transparent with patients about costs
4. Compensate hospital workers less than a living wage
5. Deliver racially segregated care

Chokshi and Beckman point to recent evidence that hospitals have been harming patients through these administrative never events. For example, The New York Times recently reported that Providence used debt collectors to collect from low-income patients who should have qualified for financial assistance or even free care.

Providence isn’t the only hospital or health system accused of using aggressive medical debt collection processes. A 2021 report found that 56 non-profit hospitals in New York placed liens against thousands of patient homes over unpaid medical debt. An earlier study found similar practices at hospitals in Virginia where over a third of hospitals in the state were found to have filed warrant-in-debt lawsuits and/or garnished wages.

“The effects of these hospital never events are often more subtle than those of medical never events, which may contribute to widespread acceptance and normalization of hospitals implementing these practices,” write Chokshi and Beckman.

“Other organizations, such as insurance companies and medical device makers, undoubtedly create harms of their own that merit dialogue. But the fact that the majority of hospitals are engaged in 1 or more of these 5 behaviors, and the possibility that rising costs at some hospitals may exacerbate these practices, necessitates attention,” they continued.

The industry experts acknowledge that some healthcare stakeholders may argue that adding these never events to the list of activities hospitals should avoid will create an additional burden on the already-strained facilities. Providers, after all, have reported an increase in regulatory burden another year in a row, according to the latest Annual Regulatory Burden Report from MGMA. EHR documentation, the use of multiple health IT systems, and quality reporting have also increased administrative responsibility, providers say.

However, Chokshi and Beckman counter that the adminstrative never events can clarify a hospital’s role. They say that hospitals should be working to stop social harms, which can manifest themselves as crippling medical debt, health inequity, and harmful workplace conditions.

“Private hospitals have expanded their purview to include addressing patients’ social drivers of health, spending billions of dollars by providing resources such as assistance with housing or establishing food pharmacies,” the article states. “Although such programs can be beneficial to patients, it is now possible for a hospital to provide one patient a free taxi ride to overcome transportation barriers and simultaneously sue another patient for medical debt.”

Health policy should also incorporate the administrative never events into payment adjustments just as it has done with medical never events, they argue. States could also require the reporting of the practices and incent change. Colorado, for example, has already done this by stopping hospitals from collecting medical debt if the hospital does not comply with price transparency rules.