Report: Millions in medical bills lead to demand for price transparency policies

A new report shows hospitals in Virginia filed 1.15 million lawsuits against patients over unpaid medical bills between 2010 and 2024, collecting $1.4 billion. PatientRightsAdvocate.org collaborated with George Washington University Law School and Stanford University's Clinical Excellence Research Center to research Virginia court records, revealing what PatientRightsAdvocate.org described as a "coordinated medical debt ecosystem in which hospitals, law firms, and courts collectively extract billions from patients." The records revealed the medical bill lawsuits inflicted patients with $45.9 million in court costs while generating $87.1 million in attorneys' fees. "In their most vulnerable hour, patients faced undue challenges, such as unclear pricing, difficulty understanding their medical bills, and unexpected legal action for debts they could not afford," said Cynthia Fisher, founder and chairman of PatientRightsAdvocate.org. "Without consistent price transparency, patients often had limited ability to anticipate or verify costs, leaving many families under significant financial strain." Interviewing patients for the report revealed how patients were routinely subjected to hidden and varying prices for hospital services, and that patients experienced significant financial and mental distress from not having access to prices or understanding their bill prices. Nonprofit hospitals were responsible for more than half, 52.7%, of medical debt lawsuits, despite receiving tax exemptions tied to providing community benefits that only cost 5.9% of hospital operating expenses. "The report illustrates just how widespread medical debt collection is: how much it accounts for all debt collections; how many hospitals, doctors, and lawyers they involve; and how they follow patients for years after requiring medical care," said Barak Richman, George Washington University Law School professor. "We aptly describe it as an economic vortex and as an ecosystem of coercive collection." Just 20 law firms filed more than half of all cases, often obtaining default judgments that triggered garnishments. Courts issued 812,948 judgments, and patients faced interest rates as high as 18% annually. "American workers' paychecks and bank accounts too often fall prey to unethical medical bill collection practices," said Arnold Milstein, Stanford physician and professor. "We hope our findings trigger much stronger protection by lawmakers, state bar associations and or employers ASAP." PatientRightsAdvocate.org wants Congress to pass the bipartisan Patient Deserve Price Tags Act, which they believe would "bring much-needed transparency and accountability to healthcare pricing and help protect patients from these harmful practices." "The widespread practice of suing patients underscores the importance of strengthening price transparency policies to ensure that patients are informed and hospitals are held accountable for unfair pricing tactics," Fisher said.