WI Hospitals Sued 37% More Patients Over Medical Debt

In a Health Affairs study, researchers from Yale and Stanford report that hospital lawsuits against patients over unpaid medical debt rose by more than a third in Wisconsin over nearly two decades, leading to an increase in wage garnishment.

The study analyzed court records from the Wisconsin Circuit Court Access system between 2001 and 2018 to highlight trends in hospitals lawsuits as well as gain an understanding of which patients were more likely to be sued. The study also analyzed which hospitals were more likely to sue their patients.

The analysis of hospitals in Wisconsin found that lawsuits increased from 1.2 lawsuits per 1,000 residents in 2001 to 1.53 lawsuits per 1,000 residents in 2018.

Most of the increase in lawsuits happened between 2006 and 2009; the number of lawsuits jumped from 1.17 to 1.53 per 1,000 residents during that time.

While the average size of lawsuits remained stable between $2,522 and $3,939 across the study period, over half of the lawsuits placed by hospitals resulted in wage garnishment, a 27 percent increase from 2001 to 2018.

From 2014 to 2018, 42,844 lawsuits were filed against patients. Researchers found that 10 percent of the 125 hospitals were responsible for nearly 41 percent of lawsuits during this period.

In addition, the hospitals represented 21.3 percent of the state’s hospital beds and 22.8 percent of inpatient discharges.

“The higher rates of lawsuits for small hospitals and in less densely populated counties points to an important rural-urban divide in hospital litigation. The finding that nonprofit hospitals had higher lawsuit rates reinforces existing evidence of the mixed relationship between hospital ownership and hospital behavior,” the researchers stated in the study.

St. Agnes Hospital/ Agnesian Health filed the most lawsuit, with 2,632 lawsuits against patients over unpaid medical bills from 2014 to 2018, accounting for 7.7 percent of patient admission.

Miles Bluff Medical Center’s total lawsuits against patients totaled to 1,763, accounting for more than 27.3 percent of patient admission.

The third highest was Waukesha Memorial Hospital, with 1,687 lawsuits.

“Hospitals with higher shares of Medicare discharges and lower shares of commercial discharges were more likely to sue patients,” the Yale and Stanford researchers explained.

“Nonprofit hospitals were more likely to sue patients than for-profit hospitals (the excluded group). Hospitals designated as critical access hospitals also had a higher rate of lawsuits per discharge.”

In addition, researchers noticed that hospitals lawsuits disproportionately affected Black people. In 2018, hospitals filed 1.86 lawsuits per 1,000 Black residents, 1.32 lawsuits per 1,000 white residents, 1.10 lawsuits per 1,000 Hispanic residents, and 0.11 lawsuits per 1,000 Asian residents.

“The higher rates of lawsuits per capita among Black patients and patients living in poorer counties contributes worrying new evidence of disparities in financial hardship across racial and income groups… these lawsuits negatively affect patients’ financial well-being and health, policies that reverse these trends may be warranted,” researchers wrote.