Imagine getting sick, getting bills you can't pay, then being sent to jail
Lawsuits, lost wages, even jail can result
By Janell Ross
September 28, 2009
Kenneth Hoagland went to jail for what started as a cold.
Hoagland had refinanced his Nashville home to pay off the $25,000 tab for his weeklong diabetes-related stay at Southern Hills Medical Center.
The new mortgage left Hoagland out of medical debt but afraid to get sick again.
Unfortunately, he did. In 2004, Hoagland was in a health insurance waiting period on a new job when a cold turned into two days at Vanderbilt University Medical Center. This time, the bill was just over $1,200.
When a collection attorney working for Vanderbilt filed suit in 2005, Hoagland was afraid to take time off from work to show up in court. After a series of hearings, attempts to collect the debt and what Hoagland says were genuine efforts to pay it, an attorney working for Vanderbilt asked a judge to issue what's known as a body attachment.
One Friday in late 2008, a sheriff's deputy went to Hoagland's home. Because he was at work, Hoagland was allowed to turn himself in the following Monday.
"They fingerprinted me, took my picture and asked some questions about my medical history," he said. "When the guy who tested (my blood sugar) asked me why I was there and I told him ... he said, 'I didn't know we did that in this country.' I told him, 'Until now, I didn't either.' "
Hoagland, 36, is one of the hundreds of thousands of Americans -- insured and uninsured -- facing collection suits, wage garnishments and, more rarely, trips to jail because of medical debt.
On the other side are doctors and hospitals that say they try to work with debtors and provide millions in free care, but unpaid medical bills affect their ability to care for others.
Medical debt isn't closely tracked by courts, but it's one of the many types of debt collection suits that keep Davidson County's General Sessions Courts so busy that the people at the center of those cases sometimes fill the courtroom's audience seating and even the jury box.
But it's the docket, the list of cases that will be heard in Courtroom 5D on any given day and the people with cases on it, that really tells the story. Some entries reveal the types of services rendered.
There are cases filed by Associates in Gastroenterology, the Anesthesia Medical Group and Nashville Bone and Joint PLLC. And then, there are the names of nearly all the area's hospitals.
The suits represent attempts to collect on bills that in cases examined this summer ranged from $81 to $22,000. They are, in most cases, bills patients never expected to accumulate.
Judge Dan Eisenstein, one of the judges who hears these cases in Courtroom 5D, said debtors summoned to court often dispute just how much is owed to a landlord or whether a credit card debt is really theirs.
But debtors rarely dispute medical bills.
"There's not a lot of dispute because people just have no choice," he said. "They needed the care, and the law says they have to cover their bills.
"But it's certainly tough to come into this courtroom and see people who have been sick or hurt and cannot pay their bills."
Medical bankruptcy rises
A study published in the American Journal of Medicine this year found that medical debt is deeply damaging the finances of American families.
Based on a survey of 2007 filings, researchers estimate 62.1 percent of all bankruptcies that year were caused by medical debt and that 92 percent of these cases involved medical bills totaling more than $5,000, or 10 percent of the family's total pretax income.
Other cases met the researchers' criteria for "medical bankruptcy" because they had lost significant income from illness or mortgaged a home to pay medical debt.
Most medical debtors contacted by researchers were well-educated, owned homes and had middle-class occupations. Seventy-five percent of those surveyed had health insurance.
And, researchers found, the issue of medical debt has grown over time. Between 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6 percent.
Hoagland, who works in information technology, never filed bankruptcy or disputed his bill. Instead, he made payment arrangements with Vanderbilt and tried to keep them.
Sometimes he and his fiancée, Sonya Davis, had to choose between paying their mortgage or $200 a month on medical bills, Davis said. When that happened, they paid the mortgage. They figured the family had to have a place to live, and the house had belonged to Hoagland's parents.
Then Vanderbilt filed suit. When Hoagland missed a hearing because of a work emergency, the court ruled in his absence that Vanderbilt was due the full amount. He missed two more court dates aimed at determining his assets.
A judge issued a body attachment -- a document issued in civil cases that demands defendants explain why they didn't appear in court. Sheriff's deputies find the defendants and, in many cases, take them to jail, where they are allowed to post bond quickly.
It's a rare action -- out of 32,126 debt cases in General Sessions Court in 2008, for example, judges issued 98 body attachments.
Hoagland made bond and the $250 that he paid was applied to his debt. His wages were garnisheed for several months, and he thought he was paid up. Then a bill arrived several weeks ago for $70 -- one he said he'll pay without question.
People delay care
Davis said the experience changed their lives.
"The choice now is, do I stay sick? Because if I go run up this bill and can't pay for it and then get arrested again, what then? What are you supposed to do?" she said.
Two months ago, they faced that question. Hoagland went to bed with a cold and woke up so listless that Davis knew immediately something was wrong.
His blood sugar was at 39. Hoagland's blood sugar is supposed to stay between 80 and 120. He could barely speak.
"I called the ambulance," Davis said. "And I hate to admit this, but as soon as they got here, I thought, 'Oh God, I hope they aren't going to have to take him.' He was sick, but I know he was probably thinking, 'We can't afford another set of medical bills.' "
The ambulance crew wanted to take Hoagland to the hospital but agreed to let Davis make him some breakfast and see if his blood sugar levels would normalize. They wouldn't leave until Hoagland drank some orange juice with a bit of sugar stirred in and his blood sugar surged.
As extreme as Hoagland's attempt to avoid another hospital bill may sound, it's not uncommon, said Shana Alex Lavarreda, the director of health insurance studies at the University of California, Los Angeles Center for Health Policy Research.
As a result of a study released by the center this year, Lavarreda began to hear troubling stories from people across the country who had delayed medical care because of existing medical debt.
"Delays in care could be something as serious as reattaching a portion of a finger or not or getting the respirator that you need," she said.
The situation highlights the fact that many insurance policies carry a high deductible. This can turn out to be burdensome for families without significant savings if someone becomes ill, Lavarreda said.
Drama outside courtroom
What happens inside Courtroom 5D at General Sessions Court can pale in comparison to the high drama in the hallway outside.
There, hospital debt collectors pull defendants to the side for hushed conversations about what they can realistically pay. If they can figure something out, defendants don't have to go back inside. The payment arrangement is entered into court records, and the person who owes the debt must pay it.
On Sept. 11, all the good hallway spots -- with seating -- were taken. So Centennial Medical Center's attorney beckoned Stacy Grondin up to the long tables where prosecutors and defendants usually sit facing the judge during trials.
The conversation was about the $997.74 bill Grondin incurred in 2006 at Centennial when her heart rate spiked.
"I really thought I was having a heart attack," she said.
Grondin, a grocery store manager, is insured. But she went to the hospital in an ambulance, and that required pre-approval from the insurance company.
So did her choice to seek care in an emergency room. She didn't have approval for that either. So when it turned out the problem was anxiety or a condition doctors couldn't precisely determine, her claim was denied.
Tom Norris, Centennial's attorney, leaned in close.
"What kind of payment can you make?" he asked.
"I think maybe $50," Grondin said.
Norris accepted but declined to comment about Grondin's case or the collection process when approached by a reporter.
On that day, the bill was actually $1,246.96 -- the original amount plus $161.75 in court costs and $87.47 in interest fees. The court costs are tacked on after collection efforts fail and a suit is filed. Interest accrues on medical debt at up to 10 percent after a court issues an order to pay.
But for Grondin, 35 and a single mother of three, that's not even the sum total of her medical debt.
While Grondin discussed her bill with Norris, her 9-year-old daughter, Emily, sat in the courtroom's gallery waiting for her mom to finish and take her to the doctor. Grondin feared Emily might have swine flu.
The little girl with the robin's-egg blue eyes and a pair of silvery scars on her forehead heard every word of the payment discussion.
Emily barely survived a 2003 car accident with her father at the wheel. He'd been drinking. She wasn't strapped in. A LifeFlight helicopter took her to Vanderbilt's children's hospital, where doctors saved her life.
Now Emily's father is in prison because of that accident, and her mother is trying to pay $2,115.25 in medical debt charged to a credit card. That's the 20 percent of Emily's bill that insurance didn't cover, plus court costs and interest.
"They sent papers to my job a couple of months ago saying they are going to garnish my wages, I think for her accident," Grondin said. "But that hasn't started yet."
Grondin said she's not sure how to feel. There's the reality that services were rendered. But then there's the fact that she is insured and still left with medical bills, collectors' phone calls and soon, maybe, a wage garnishment.
"I know it's our responsibility. It is ultimately my responsibility to pay," she said. "But ... when I first saw all the bills I was kind of mad because I am paying for this insurance which I barely use. Then, when it's needed, it's hardly there."
Grondin's medical debt story doesn't end there. Her boyfriend, who has two children of his own, recently declared bankruptcy because he couldn't have afforded child support and other bills if his wages were garnisheed to collect more than $7,000 in medical bills.
'It's good to have a plan'
Michael Wade Taylor, 57, was in Courtroom 5D just after 9 a.m. Aug. 28 when Judge Eisenstein called his name and case. Wedged between two men with debt cases of their own, Taylor stood and answered clearly, "Here."
Southern Hills Medical Center's attorney waved him into the hallway to work something out.
Today, Taylor is an unemployed construction worker. He had a job but no insurance in 2006, when doctors initially thought he'd had a stroke.
He spent several days in intensive care at Southern Hills, having a stent threaded from his groin to his heart to check for blockages. Later, he took a stress test on a treadmill.
The eventual diagnosis: "They told me I had the heart of a teenager and didn't know what was wrong with me," Taylor said. "They sent me home, and since that time I kept going down and going down.
"Then I find out that for those four days they charged me $33,000. Thirty-three thousand dollars for nothing."
Hospital staff checked to see if he could qualify for TennCare -- state-subsidized medical coverage -- but his income was too high. Then they talked with him about financial aid and setting up a payment plan. Taylor said he didn't qualify because he didn't have a checking account.
The bills started coming, then the phone calls, then the loss of his job in 2008.
Turns out either he didn't have the heart of a teenager or it aged very quickly, Taylor said. Two months ago, he had open-heart surgery for an arterial blockage. This time, because he was unemployed, TennCare paid the tab.
He and Southern Hills' attorney reached an agreement that would let Taylor pay $20 a month until he covers $3,000 of the bill from three years ago.
"It's good to have some kind of plan," he said. "Really having that hanging over me was just something that took a situation from bad to worse."
Hospitals provide free care
Deals like Taylor's -- taking a $33,000 bill down to $3,000 -- aren't uncommon, area hospital systems say. They give away millions in medical care each year.
Meanwhile, they say, unpaid medical debt keeps them from covering important capital costs -- such as replacing buildings and equipment -- or improving treatment and services.
Each has a policy of absorbing or forgiving some medical debt, but that benefits the poorest and most severely ill patients. Employees help some patients who qualify, such as Taylor, enroll in TennCare.
In fiscal year 2009, for example, Vanderbilt had $274.3 million in unpaid medical bills and absorbed about $197.9 million of that. It writes off debt for patients whose bills exceed their annual income or who earn less than 250 percent of the federal poverty rate -- about $55,000 for a family of four.
Vanderbilt provides almost half of all the uncompensated care delivered in Davidson County, spokesman John Howser said.
TriStar Health System, which operates five health-care facilities in the Nashville area, offers similar help for low-income patients.
"The No. 1 reason for charity care denials is that they do not submit the application," spokeswoman Teri Smith said.
The hospital system provided about $158 million in uncompensated care during calendar year 2008. This figure includes unpaid medical debt, bills that the hospital wrote off for its poorest patients and discounts offered to uninsured patients, Smith said.
Saint Thomas Health Services, which operates Saint Thomas and Baptist hospitals, is owed $90 million in unpaid medical debt for services provided over the past three years, spokeswoman Rebecca Climer said.
This figure does not include what the hospital system has forgiven or provided free to patients who cannot pay, Climer said. The system is a part of Ascension Health, the largest not-for-profit health-care system in the nation.
The hospital has a fiscal responsibility to attempt to collect unpaid debt from those who can pay, Climer said.
MEDICAL WOES LEAD TO MORE BANKRUPTCIES
As recently as 1981, only 8% of families filing for bankruptcy did so in the aftermath of a serious medical problem.
By contrast, a 2001 study found that illness or medical bills contributed to about half of bankruptcies.
And in 2007, 62.1% of all bankruptcies were caused by medical debt.
SOURCE: American Journal of Medicine study