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.

In 2006, Keel wrote a letter to the judge in her case, begging the court to help the Keels work out some kind of deal with the hospital. They were four payments behind and in danger of losing their home. Johnny Keel had gone back to work, but most of his paycheck went toward health insurance.

"We have not previously replied to the attorney because we didn't have any money to give them and didn't think we could come to the table without money to offer," she wrote. "We have since realized that simply not dealing with financial situations doesn't help, whether you have money or not."

They'd lurched into debt after Johnny Keel's heart attack and were filing for bankruptcy, Keel told the judge in her letter, begging him for leniency.

Ignacio Alaniz  and his girlfriend, Theresa Malone, were told Alaniz would get charity care after he was brought to Memorial Hermann-Texas Medical Center in January 2012, but Memorial Hermann Health System is  suing him for more than $456,000 in medical bills, interest and legal fees.
Photo By Chris Curry
Ignacio Alaniz and his girlfriend, Theresa Malone, were told Alaniz would get charity care after he was brought to Memorial Hermann-Texas Medical Center in January 2012, but Memorial Hermann Health System is suing him for more than $456,000 in medical bills, interest and legal fees.
Ignacio Alaniz has a footlong scar on his side from the incision doctors used to get at his broken ribs and collapsed lungs after he was run over by his car in January 2012.
Photo By Chris Curry
Ignacio Alaniz has a footlong scar on his side from the incision doctors used to get at his broken ribs and collapsed lungs after he was run over by his car in January 2012.

Memorial Hermann lawyers had the letter thrown out and the judge handed down a declaratory judgment. The case was dismissed for want of prosecution two years later, but the Keels' marriage had busted up by then. Johnny Keel must have worked out some deal with the hospital because he returned to the hospital recently with more heart problems, Patricia Keel said. Between the heart attack, the surgeries and the massive debt, the burly, confident man she'd known disappeared. "He was a broken man after that," she said.
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People expect nonprofits to function as pure charities, but that's not how the systems are built now. University of Houston professor Patricia Gray, a former state legislator who serves as director of research at the school's Health and Law Policy Institute, says hospitals in the United States moving to sue uninsured patients isn't as unusual as you'd think. Nonprofits have been landing in hot water for years over the quality of their charity work and the way they handle uninsured patients, Gray said.

"I don't think they want to appear that they're just giving it away to anyone who walks in the door," Gray said. "Hospitals do have to get paid. In this country, I think, patients think that health care is a right, but this is one of the few countries where it isn't."

While hospitals like Memorial Hermann wear the hat of being a nonprofit, rising costs and the need for funds have shaped them into entities that function more like for-profit companies. Once that shift takes place in a large organization, it's difficult to maintain the charity approach in the system, according to the book To Profit or Not to Profit, a study on the financial changes in nonprofits.

UTMB, which is located in the district Gray represented as a legislator, has been sharply criticized for years with complaints that it doesn't do enough to maintain its nonprofit status and tax exemption in the community. MD Anderson came under fire for attempting to turn away a Lake Jackson woman diagnosed with acute leukemia because her limited-benefit insurance wouldn't cover enough of the bill and hospital officials wanted her to pay more than $100,000 up front, Gray said. MD Anderson was also the focus of a recent story in Time magazine in which the author called out the nonprofit hospital for pulling in a profit of $531 million, a 26 percent margin on $2.05 billion, and for paying its president and CEO, Ronald DePinho, a salary of more than $1.8 million.

Texas requires that at least 4 percent of patient revenue actually be spent on charity care, but right now that includes full-price bills for the uninsured and the charges that Medicaid won't reimburse, along with various community services, meaning the hospital is providing charity care, so the money doesn't go as far as you'd think, Painter said. Who qualifies for the charity care can also be a murky question.

Patients at or below 200 percent of the Federal Poverty Guidelines will receive charity care, Memorial Hermann's Campbell said. Those who are 201 percent to 400 percent above the federal poverty level are charged on a sliding scale. According to the current guidelines, that means anyone who earns less than about $23,000 a year qualifies for free care. You have to make about $46,000 or less to be charged on a sliding scale. This sounds like a clear-cut policy, but Alaniz and Malone never got a direct answer about whether they qualified for charity.

President Obama's essentially stalled Affordable Care Act aims at fixing some of these ­problems. The act has language that will shift hospitals away from charging a fee for each service and toward focusing more on the quality of care. If a patient is successfully treated and doesn't have to return to the hospital, the hospital will be rewarded for that.

Nonprofits will also be required to be more transparent about how patients can qualify for charity programs, what bills will be covered and what the patients will have to cover — a way of trying to force hospitals to drop the veil hiding what people are expected to pay for their medical care.
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Alaniz got out of the hospital in February 2012, after almost a month in the ICU. He was working on his own physical therapy using a pulley he'd rigged up in the garage, because he and Malone couldn't afford the physical therapy appointments suggested by the doctors, $70 a visit.

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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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