Getting Stuck: Uninsured Patients Slammed with Lawsuits by Not-for-Profit Hospital

Memorial Hermann treats patients without insurance, tells them not to worry about the cost and then sues them for thousands of dollars.

A Houston Press review of civil court documents filed with the Harris County District Clerk shows this has been going on since 1999, with Memorial Hermann filing against more than 90 patients for unpaid medical bills. Many of the cases filed have been dismissed for want of prosecution, meaning that the hospital decided not to prosecute the cases. Often, the cases not dismissed were seen through to default judgments when the parties being sued by Memorial Hermann didn't answer the suits. In lieu of a trial, judges ruled with the hospital and ordered unrepresented defendants to pay at least a portion of their debts. In some cases, patients were able to renegotiate and pay a fraction of what they were originally charged. In others, they were ordered to work out a plan to pay off thousands of dollars in bills.

Memorial Hermann spokesman James Campbell declined to comment on the Alaniz case, saying he could not discuss it because it is pending litigation. He said that Memorial Hermann sees more uninsured patients in the community than any other hospital, including the Harris County Health System. Memorial Hermann donated just under $400 million in uncompensated care last year, Campbell said.

He said the hospital doesn't differentiate between uninsured and insured patients in regard to patient bills. "When it comes to uninsured patients, we don't look at it that way as a system. We look at it as debt collection, just like any other hospital," Campbell said.

"There is nothing contradictory about being a not-for-profit organization and collecting a debt," Campbell stated in an e-mail.
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Memorial Hermann is a nonprofit, but the hospital system's annual revenue in fiscal year 2010, according to the most recent annual report filed with the U.S. Department of Health and Human Services, was more than $2.9 billion. Expenses came in at under $2.7 billion, leaving more than $228 million in revenue on the table, according to the report. Even after subtracting the $582 million Memorial Hermann donated in care — the bulk of it made up of unreimbursed medical expenses from Medicaid patients — the nonprofit still recorded a profit of more than $200 million and an endowment of more than $3.8 million. Memorial Hermann President and CEO Daniel Wolterman was paid a salary of close to $2.2 million that year.

Despite the hospital's healthy financial books, Alaniz's story isn't an unusual one. Lawyer Tariq Gladney has represented clients who qualified for assistance from Lone Star Legal Aid and didn't have the means to pay hospital bills. In the six or seven cases in which he has represented Memorial Hermann patients since joining the nonprofit legal service in 2008, he said, it was a matter of staring down the hospitals, explaining that his clients would never have the money to pay.

A client's home and up to $60,000 of property for a family of three are protected by law from collections. It's rare to see a client in Lone Star who is able to own a home or has more than $60,000 in assets, Gladney says. But he says that Memorial Hermann lawyers have sat across from him like cowboys in an Old West shootout, unwilling to back down and acknowledge that they wouldn't be collecting the debts. Memorial Hermann dropped the cases in every instance, but Gladney is still mystified as to why the hospital's lawyers pursued these suits in the first place.

"I have yet to see another hospital do this," Gladney said. "It doesn't make much financial sense. Most of my clients are judgment-proof."

It is possible to argue the hospital lawyers down if you can't get your case dismissed. One patient, Theodore Achtarides, responded to the 2009 suit brought against him by filing a sworn affidavit flatly denying all of Memorial Hermann's allegations. He contends that he never gave the hospital permission to treat him when he was in sound mind, since he was taken there while in medical distress. The hospital sued Achtarides for more than $300,000, including more than $77,000 in legal fees. Ike Exezidis, the lawyer representing Achtarides, stated in court documents that adding the legal fees wasn't fair; Achtarides insisted that he was never served with papers notifying him of the suit or contacted by Memorial Hermann's lawyers. His bill was also higher than it would have been if he had had insurance, Exezidis pointed out in the affidavit. Achtarides also picked up a staph infection while in the hospital, he added.

"I am not being charged the reasonable and necessary billing for the alleged services provided," Achtarides stated. "Plaintiff is seeking payment for an amount which is not in accordance with all other contracts they enter into to provide medical care, such as with other health insurance companies and social security."

After Achtarides filed his many objections to the suit, the two sides worked out an agreement. He was to pay about $20,000 in medical expenses and $5,000 in legal fees, a fraction of the bills cited in the original suit.

However, Vivian Ho, the James A. Baker III Institute Chair of Health Economics at Rice University, backs up the Memorial Hermann ­position, insisting that hospitals shouldn't automatically wear the black hat in such cases. About 28 percent of Houston's population is uninsured. Ben Taub, the only public Level 1 trauma center in the city, is one of the busiest trauma centers in the nation, partly because it's the place uninsured people go for medical care. Memorial Hermann-Texas Medical Center, the flagship facility in the 12-hospital system, also calls itself one of the most active trauma centers in the nation, taking emergency patients from all over Houston whether they have insurance or not, as required by law. This comes at a time when nonprofit hospitals across the country have recorded a jump in unpaid medical bills, which rose to more than $41.1 billion in 2011, according to a report issued by the American Hospital Association. Because of this, Memorial Hermann also deals with a large portion of the uninsured population, Ho said.

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32 comments
fratdawgg23
fratdawgg23

Health care should be right in this country. Instead of spending so many billions of dollars on war equipment to shatter the societies in smaller, weaker countries, we should reappropriate a few billion taxpayer dollars for healthcare.

John Hodges
John Hodges

What's really interesting is that George Hermann stated in the original hospital charter that it would ALWAYS provide charity care, and would never charge patients that couldn't pay...

Julie T Vu
Julie T Vu

but isn't he not happy that they saved his life?

Shannon Robichau
Shannon Robichau

Yep. Medical care isn't free. Ask all of those paying $600 a month for health insurance. They saved his life, he should at least try to pay for it.

papaoso
papaoso

It's a shame that even poor countries from Latin America have better Health care system than USA, where social security is not the best, but the tax contributions help to provide assistance for their citizen, US Government regardless of Democrat or Republic, instead of wasting money and resources on Food stamps, should fix the Health problem.

joesmithers
joesmithers

So he made a conscious choice to not have health insurance but then doesn't want to be responsible for his health care bill when he needs it.  The downfall of America, personal responsibility.  So, can I cancel my car insurance, crash my car and then demand the shop to fix it for free?

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

I would not be surprised that if Alaniz had an "average" health care plan in effect at the time of the accident, that the actual amount paid to Hermann would have been on the order of 25% to 30% of what the hospital claims that he owes.

rdorr1
rdorr1

We have the crappiest healthcare system in the world.


Owen Dunn
Owen Dunn

On my phone the picture looks like an ass

Mark Haubrich
Mark Haubrich

Counter sue them back. The federal pro bono Lawyer in the area should be on this. Mgh

jberlat1
jberlat1

We all pay for it in higher taxes. 

Colleen Chriss
Colleen Chriss

The hospital cannot let everyone have free surgeries. Go after the companies that create $10k skin grafts. These people deserved to be sure because, from the article, it seems no payments were made from September to the following January when the suit was filed. If you neglect almost half a million in bills, wouldn't you expect a suit? Memorial Hermann workers like Ramon should be more easily contacted, but if you want to pay a bill I promise you someone will talk to you.

Vanessa Man
Vanessa Man

Oh, and they always strive to keep you at least 8 hrs so they can charge more. Also, when I had to go back after I was insured again they wanted to overcharge my co-pay and said that unless I paid they were not going to treat me. My card said $75 for hospital ER and they wanted to charge $250 on the spot. I had a big argument with them and once I threatened to sue, their harassment stopped.

Vanessa Man
Vanessa Man

They did that to me. I went to the ER with swine flu and the ER doctor kept saying that I was wrong and kept ordering tests afters tests. In the end did the flu testing against his will. The bill? Over $5K. It is the worse hospital.

h_e_x
h_e_x

Too bad there isn't any other way to go about providing healthcare. Nope, no other way whatsoever.

SoSezYou
SoSezYou

And people STILL say the best medical system is in the United States? This is insane. No other word for it. 

witchtoy
witchtoy

@Shannon Robichau 8th paragraph down: Alaniz didn't have insurance — he'd just gotten a new job after months of being out of work, he was healthy and it would have taken too big a chunk out of his weekly paycheck —  Very clear. Plus, as pointed out later, he also pays child support. Get far enough behind on THAT and you get thrown in jail. And then he had to build his own strength back up, by himself, because they couldn't afford physical therapy! I LOVE how people think poor and working class people have buckets and buckets of hidden cash lying around to pay for stuff.

gilbertdeirdre
gilbertdeirdre

@Shannon Robichau The point in this article is that Memorial Hermann is suing him when it is a charity hospital.  What they are not telling you is they are using most of the funding for their salaries and that is not what it is suppose to be used for.  They killed my daughter, covered it up and billed her Medicaid for charges they did not do.  This hospital is a criminal facility and they will get caught very soon.

witchtoy
witchtoy

@joesmithers He "chose" not to have health insurance because, as it stated in the article, it would have eaten most of his check. And the only thing worse than owing a hospital money is owing child support. THAT they can put you in prison for.

h_e_x
h_e_x

@joesmithers I thought the downfall was because we have a Commie-Nazi Muslim President? I always get confused as to what is causing the downfall of this or that.

susanroucis
susanroucis

@rdorr1 No we have the most irresponsible people here that expect others to take care of their bills and feed them too

h_e_x
h_e_x

@susanroucis @rdorr1 Who do you think pays the bills at the end of the day? Please tell me you think you aren't.

SoSezYou
SoSezYou

@jberlat1 Yeah, sure and might as well end his life as be able to pay off that life crushing debt. You people in this country just don't understand the concept of going to a doctor and walking out of his office WITHOUT having to pay for visiting. You have paid thru the nose for so long, you actually get aggressive about someone coming up with a plan for you to pay less..or nothing. And as the other gentleman proves, we ALL end up paying for it anyway...because 99% of people WOULDN'T be able to pay off this half a million dollars either. Why not stop the silliness and have Medicare for all? 

h_e_x
h_e_x

@SoSezYou @jberlat1 Because we want the freedom to become poor because we had to go to the hospital, or something like that.

 
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