Minnesota Hospital Exposed for Harsh Debt Collection Practices

For many people, the most difficult aspect of financial hardship is enduring creditor harassment and facing wage garnishment and other harsh consequences of debt collection. While debtors have rights under the Fair Debt Collection Practices Act (FDCPA) and other laws, debt collectors often abuse those rights by making unauthorized contact or false representations in an attempt to speed up the process.

A high profile example of potentially illegal practices recently made headlines in Minnesota when Fairview Health Services was accused of employing harsh tactics to collect payments from patients. A report from the Minnesota Attorney General included allegations of demanding payment in advance in the emergency room and suggesting to post-surgical patients that they would not receive medical care unless they settled existing debts.

The investigation uncovered reports that employees of Accretive Health, a medical debt collection company, were embedded as employees in ERs to expedite payment collections. Failing to identify themselves as debt collectors and gaining access to private health records are two potential violations of federal laws that the state has identified.

Documents obtained by a recent report in the Minneapolis Star Tribune indicate that the University of Minnesota Medical Center, which is owned by Fairview, violated federal law by suggesting to poor patients that they would not receive treatment if they could not pay. Those documents came from an investigation by the Centers for Medicare and Medicaid Services, which could result in the hospital losing its eligibility to participate in federal health care programs.

Medical Bills and Bankruptcy: Debt Relief for Overwhelmed Patients

According to a study released earlier this year by the American Journal of Medicine, bankruptcies due to medical debt increased by nearly 20 percent from 2001 through 2007. At the end of the study period, more than 62 percent of all bankruptcies involved income loss due to illness and unsustainable medical debt. That contrasts starkly with figures from 30 years ago, when less than 10 percent of bankruptcy filings came in the wake of serious medical problems.

For individuals and couples who have suffered financial difficulties due to an illness or accident that led to massive medical bills, the Chapter 7 and Chapter 13 bankruptcy processes provide powerful solutions. Because medical bills are a common form of unsecured debt, they can be discharged via bankruptcy, giving the debtor much needed breathing room and sound footing to regain their financial and personal health. Just as important, a bankruptcy filing creates an automatic stay that prevents creditors from making any attempts to collect on existing debt.