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Wisconsin hospital files 200 debt lawsuits during pandemic – Health News Today

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Alysa Gummow didn’t know what to think in October when the letters from law firms arrived in the mail. She had filed for bankruptcy in 2017 to restructure nearly $50,000 in debt — mostly from an earlier hip surgery. But that was resolved. Why was she getting these letters now?

The 37-year-old learned that Froedtert South hospital in Kenosha, Wis., was suing her to recover about $1,000 in separate bills that her health insurance didn’t cover.

A maskless man visited her home a few days later to make the lawsuit official, delivering the message: “You’ve been served.”

In April, Froedtert South said it would make debt lawsuits “rare” during the pandemic. But the hospital has since filed at least 231 lawsuits in small claims court against debtors like Gummow. It filed more in 2020 than it did in 2019 — 314, compared to 282.

This year’s lawsuits collectively seek to recoup $1.1 million in alleged debt, according to a WPR/Wisconsin Watch analysis.

A previous Wisconsin Watch/WPR investigation found that hospitals statewide sued dozens of patients early in the pandemic. Froedtert Memorial Lutheran in Milwaukee and Green Bay-based Bellin Health Systems dismissed some of those lawsuits following the April 1 report. They were among several hospitals — including Froedtert South — that pledged to limit aggressive debt collection during the public health crisis.

“As a general matter, Froedtert South has suspended filing small claim suits during the COVID-19 pandemic,” J. Thomas Duncan III, the hospital’s vice president and chief operating officer, wrote in an April 1 email.

The hospital might file a suit “in rare circumstances” to preserve its rights — for instance, if the statute of limitations for suing is about to expire, he added.

Duncan declined to comment for this story.

Other Wisconsin health care providers have recently sued over debt, but Froedtert South’s volume stands out.

Friendship-based Gundersen Moundview Hospital and Clinics filed at least 15 suits after promising a pause in March. Spokesman Chris Stauffer called the lawsuits inadvertent and now discontinued, adding: “We regret the oversight.”

Affiliates of SSM Health have filed nine debt lawsuits since April. Those likely involve unpaid bills from before 2020, said spokeswoman Kim Sveum. Recognizing families’ pandemic struggles, the system says it will “not proceed with any collection matters” for unpaid services occurring this year.

Suing patients remains a “tried and true way of recovering on debt,” said Nicholas Bagley, a University of Michigan law professor — even if it seems to conflict with the not-for-profit spirit of community service.

In exchange for the tax breaks, not-for-profit hospitals agree to serve their communities by working to bolster public health, conducting research and providing care to people experiencing poverty.

Gummow and many other indebted patients are underinsured. About 366,000 nonelderly people in Wisconsin lack any insurance coverage.

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