This is new: Hospitals garnishing wages over a $200 bill?

[SunnyD]

I am first going to preface story this with a "this is NOT me". I've learned a long time ago to pay my bills. This one is my brother-in-law who we've been trying to help get turned around over the last year and change, but breaking bad habits and reeducating what was poorly (or never) taught in the first place... yeah, well.

But this story is about hospitals, and this is one that I've never seen before.

Anyway, Mr. Brother-in-Law had a trip to the ER probably about 8 months ago. He has insurance through work, and insurance picked up everything but the copay which was $200. Brother-in-Law doesn't make terribly much, so $200 is about half a week's paycheck on a good week. So he let it slide. And slide it did. He didn't even make an attempt as far as I know. Shame on him. I'm sure it went to collections.

This is where it gets a little weird though. A month or two ago we get a knock on the door. Brother-in-Law gets served. The hospital is taking him to court over said $200 bill. Brother-in-Law idiotically no-shows, so it's a default judgement (he's his own man, sink or swim on his own; we're just providing him a roof over his head). Last night he comes home and tells my wife that they're going to garnish his wages over said bill.

The process is legit, I understand that. I have no problems with that. But this is... wow. I've been rebuilding my own credit for a long time and will likely never be done or satisfied. I've had old hospital bills from children being born or ER visits in the past, some even several years old, some for many times that amount. At worst those bills went to collections. I have never seen a medical bill go through as brief an adjudicated process and end up in garnishment, ever.

Is this a new thing with hospitals?

(And yes, we're trying to re-educate brother-in-law as best we can to make him a functional human being after being screwed over by his parents for far too long. We have him house trained so far...)

 

[NikolaeVarius]

Hospitals have always been able to garnish wages. Specifically however, only when the courts allow them to do it.

 

[vi edit]

Seems like a number of community and regional systems are moving to that practice. My guess is that they are really starting to feel the medicare reimbursement crunch and are reaching for any way they can to get dollars back into the system.

 

[SunnyD]

Hospitals have always been able to garnish wages. Specifically however, only when the courts allow them to do it.

I understand that. As I said in the OP I am completely okay with the process here, in fact my brother-in-law was a dickhead for not taking care of it, not responding to the summons and letting it get to a default judgement anyway. It's his fault, no if's, and's or but's.

What I'm saying here is in all of my dealings and all of the people I know who have had to deal with hospital bills and collections, this is the first time I've ever seen a hospital do such a thing, let alone over a $200 bill.

I mean honestly it probably cost the hospital more to collect that $200 at this point than it would have just to let it sit. (Granted with a judgement they're now entitled to all appropriate fees to tack on)

 

[Anubis]

my dad is a Doc and was in private practice for 30 years
he sent people to collections for as little as 10$

why, because fuck those pieces of shit who would rather take a credit hit then pay a 10$ copay bill

and it the only cost of sending people to collections is that you only get 50-70% of the amount back if they pay. but that's better then 0%

 

[NetWareHead]

I mean honestly it probably cost the hospital more to collect that $200 at this point than it would have just to let it sit. (Granted with a judgement they're now entitled to all appropriate fees to tack on)

Dont know what to say other than this has always been their right to go after a debtor. I worked at a law firm that had a collections department and we had a few hospitals/medical offices that regular sent us delinquint accounts. This was over 10 years ago. We regularly garnished wages, levied bank accounts and needed to appear in court when a debtor wanted to contest the charges.

Part of what we did was try and make the handoff as easy as possible so our customers could transfer delinquint accounts so our legal team could begin immediate work on them. In the best of cases from receipt to final judgement sometimes took as little as 3 weeks. (with a judgment we could begin garnishments, levies etc...) in 1-2 months we were recovering money for our customer.

You said you yourself experienced old hospital bills that went to collections. What was the result of being sent to collections? Because usually a garnishment is the result of a successful collection action.

 

[tynopik]

I mean honestly it probably cost the hospital more to collect that $200 at this point than it would have just to let it sit.

No, it will cost your brother-in-law more than $200 to get the bill paid

(Granted with a judgement they're now entitled to all appropriate fees to tack on)

exactly

 

[maniacalpha1-1]

I was looking at individual health plans. Seems like the most expensive one still has a 20% co-pay for surgery/hospitalization. So...let's say you have to have a $50,000 surgery. Even if you purchased the most expensive health insurance at $400-$500 a month, you will still get popped for $10000 in that scenario. What are the statistics on the average person's savings? Unless it's a lot more than that, then wouldn't this mean that most people who have to have any serious medical treatment will be doomed to either lose all their savings or be forced to beg/negotiate with their medical providers? I mean, someone who does the right thing and buys the best coverage will still be required to pull their pockets out of their pants and prostrate before the hospital.

Note: I am talking about individual health plans, I realize group plans may be better than that on the co-pay. But for people not employed and able to take advantage of group plans, it's not an option.

 

[vi edit]

Collections is different than garnishing wages. Garnishing wages is takes a court order. It's a much more…aggressive stance.

 

[Schfifty Five]

my dad is a Doc and was in private practice for 30 years
he sent people to collections for as little as 10$

why, because fuck those pieces of shit who would rather take a credit hit then pay a 10$ copay bill

and it the only cost of sending people to collections is that you only get 50-70% of the amount back if they pay. but that's better then 0%

Collection agencies will buy outstanding receivables from you for that much?

Seems kinda high, always thought it was much lower.

 

[NetWareHead]

Collections is different than garnishing wages. Garnishing wages is takes a court order. It's a much more…aggressive stance.

Garnishment is one tool a "collections agency" has in their arsenal. Usually the 2 go hand in hand.

 

[waggy]

I have no issue with the hospital going after him. $200 bill? how can you not pay that. Even if $200 at once is hard. No hospital is going to bitch if you pay them $10 a month.

just send them something.

 

[vi edit]

Garnishment is one tool a "collections agency" has in their arsenal. Usually the 2 go hand in hand.

In my understanding (and I'm not versed in this area at all) is that in many of these garnishment situations the hospitals themselves are managing the court orders and executing the garnishment. As opposed to settling on sale of the debt and letting a collection agency handle it. It just seems a lot more…personal?

 

[manimal]

They would have set up a payment plan for as little as10 a month like waggy said.


Stupid is as stupid does.

 

[jlee]

I was looking at individual health plans. Seems like the most expensive one still has a 20% co-pay for surgery/hospitalization. So...let's say you have to have a $50,000 surgery. Even if you purchased the most expensive health insurance at $400-$500 a month, you will still get popped for $10000 in that scenario. What are the statistics on the average person's savings? Unless it's a lot more than that, then wouldn't this mean that most people who have to have any serious medical treatment will be doomed to either lose all their savings or be forced to beg/negotiate with their medical providers? I mean, someone who does the right thing and buys the best coverage will still be required to pull their pockets out of their pants and prostrate before the hospital.

Note: I am talking about individual health plans, I realize group plans may be better than that on the co-pay. But for people not employed and able to take advantage of group plans, it's not an option.

There's no maximum out of pocket for individual plans?

 

[purbeast0]

sounds like your sister picked a real winner.

i'll never understand how a grown ass adult can't pay a bill like $200 with a credit card. i have some friends like that who are in their 30's and don't even have credit cards and they ask to borrow $30 here and there from people. just makes no sense.

 

[NetWareHead]

In my understanding (and I'm not versed in this area at all) is that in many of these garnishment situations the hospitals themselves are managing the court orders and executing the garnishment. As opposed to settling on sale of the debt and letting a collection agency handle it. It just seems a lot more…personal?

Either way is permissible. Hospitals usually have a pretty sizeable legal department for medical claims, malpractice. So why not have their lawyers do collections for the hospital as well? All it take is an attorney filing with the court and then getting a judgment. Whether a hospital employed lawyer does it or sending the debt to an agency who performs that is irrelevant.

edit: if a hospital does it themselves, they get to keep 100% of the recovered debt. A collection agency will take a cut for themselves as a service fee

 

[maniacalpha1-1]

There's no maximum out of pocket for individual plans?

Does it really apply that way? If so, then those are much better than I believed.

But I (probably erroneously) read the benefits summaries as saying it was 20% co-pay after deductible. Of course, that could be interpreted as not after the maximum out of pocket deductible, but after the deductible but still subject to maximum out of pocket.

I actually work in P&C insurance, NOT health, and those policies are, from a certain point of view at least, much easier to read. This stuff is one reason I won't touch health insurance as a career.

 

[SunnyD]

You said you yourself experienced old hospital bills that went to collections. What was the result of being sent to collections? Because usually a garnishment is the result of a successful collection action.

Nothing. They would usually sit in collections and rot only to eventually be packaged and be sold off to another collection company if at all.

I recently dug up, I think a year or two ago, a couple old bills from when my son was born back ~6 years ago. I was going through boxes of old paperwork and came across them and decided to reconcile against some credit reports - after calling the hospital to verify they were still owed. They were still with the original collection agency they were filed with. One was for about $30 and another for I think $120 (room fees for telephone and something else). I paid them directly with the hospital. A week later the accounts were removed from my credit report from the CA.

This has been fairly typical of collection actions over the years for me. Hell, even the only judgement (commercial, not medical) I've personally had in my lifetime which was even for a fair amount (around $7500 iirc) sat for around a year and a half and never resulted in garnishment. I ended up settling and sending agreed upon payment. Oh to be young and stupid. That was about 15+ years ago.

 

[NetWareHead]

Nothing. They would usually sit in collections and rot only to eventually be packaged and be sold off to another collection company if at all.

I recently dug up, I think a year or two ago, a couple old bills from when my son was born back ~6 years ago. I was going through boxes of old paperwork and came across them and decided to reconcile against some credit reports - after calling the hospital to verify they were still owed.

They were still with the original collection agency they were filed with. One was for about $30 and another for I think $120 (room fees for telephone and something else).

I paid them directly with the hospital. A week later the accounts were removed from my credit report from the CA.

Sounds like that was a business decision by the hospital (which still owned the delinquent account) and the collection agency to not pursue the matter further. Other than dinging your credit, it sounds like you got lucky. Im pretty sure if your amount had been considerably higher, you would have seen a garnishment or a levy etc...

Obviously it costs $ for an agency's lawyer to travel all the way to the venue (usually the county courthouse) where the debt is owed. So small debts like you had usually just rot away until they are declared unserviceable and discharged permanently.

Not sure what the statutes are in your state but when that happens they also disappear from your credit report.

 

[SunnyD]

sounds like your sister picked a real winner.

i'll never understand how a grown ass adult can't pay a bill like $200 with a credit card. i have some friends like that who are in their 30's and don't even have credit cards and they ask to borrow $30 here and there from people. just makes no sense.

It's one of those "old habits die hard" situations to be honest. He comes from a family that pretty much leaves a trail of financial destruction behind them wherever they go. He is the only one even remotely capable of holding down a job, let alone wiping his own ass it seems. His mother has ruined all of her children's credit by putting bills in their names and running them up, etc.

Finally, after several years of suggesting to get the hell out and even offering to help, he finally took us up on the offer to put a roof over his head so he could get out of there. Like I said, he hasn't had much in terms of a role model for financial responsibility so it's an uphill battle.

Sounds like that was a business decision by the hospital (which still owned the delinquent account) and the collection agency to not pursue the matter further.

That's my point exactly. This seems like a general change in the business decision direction as of late, since I'm hearing a lot more pressure tactics coming from hospitals in general about billing. Faster collection submissions, more aggressive billing collection, and using courts over small bills like this. It just seems like a shift in practice to me.

 

[NetWareHead]

That's my point exactly. This seems like a general change in the business decision direction as of late, since I'm hearing a lot more pressure tactics coming from hospitals in general about billing. Faster collection submissions, more aggressive billing collection, and using courts over small bills like this. It just seems like a shift in practice to me.

I left the collections law firm over 7 years ago and they were just beginning to get into electronic submission to the court with a lawyer's e-signature. This eliminated alot of the travel requirements and enabled claims to be filed with the courts much much faster than the manual filing of paperwork in person or mailed to the court for processing. From my work with attorneys over the years, they are notoriously slow to adopt newer technology. I know that when that began happening at my old firm, all of the sudden, claims that were rotting away suddenly became profitable to collect on.

 

[highland145]

That's my point exactly. This seems like a general change in the business decision direction as of late, since I'm hearing a lot more pressure tactics coming from hospitals in general about billing. Faster collection submissions, more aggressive billing collection, and using courts over small bills like this. It just seems like a shift in practice to me.

Had enough of losing $$, maybe. I know our local one just lost some medicare/aid funding so I imagine they'll ramp up too. And I think medicare/aid are paying less for services.



S.C. has no garnishments....sucks. $80 for a summons. Judgements are useless unless the person has real assets that can be taken. S.C. will take state tax refunds if the person owes medical/child support.

 

[Insomniator]

It's one of those "old habits die hard" situations to be honest. He comes from a family that pretty much leaves a trail of financial destruction behind them wherever they go. He is the only one even remotely capable of holding down a job, let alone wiping his own ass it seems. His mother has ruined all of her children's credit by putting bills in their names and running them up, etc.

Finally, after several years of suggesting to get the hell out and even offering to help, he finally took us up on the offer to put a roof over his head so he could get out of there. Like I said, he hasn't had much in terms of a role model for financial responsibility so it's an uphill battle.

And these are the kinds of people we are supposed to raise the minimum wage for 🙄

Grown adult skipping out on $200 that could be paid in probably the most leniant ways possible. I am suprised they went this far though, I've heard of much worse with no penalty.

 

[LTC8K6]

Everywhere I have been to the doctor or ER, they get the copay up front. I've been to the ER twice, and both times the copay was taken at admission.