RIP Medical Debt gives $278 million to a chain of hospitals to wipe out the overdue medical debt of some 82,000 former patients — most of whom would have qualified for the hospital’s own indigent patient relief plan. Is it a good idea to give charity money to corporations, rather than to the people who incurred the debt? How is it possible that so many people didn’t know about, or failed to complete applications for, the hospital’s own plan designed to avoid driving people to the poor house?
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10 replies on “Medical Debt Wiped Out: Charity Pays Off Hospital Bills for 82,000 Former Patients”
This hospital/medical/pharmaceutical billing/charging system is beyond cumbersome, corrupt, and criminally negligent. Partly due to governmental red tape, partly due to the hospital/medical/pharmaceutical systems corporate bureaucracies delayed billing practices, and then you get to the insurance companies bottom line.
Think about it, would you go to a store/restaurant/business order items without knowing the cost, then leave without ever receiving a bill? Then later (often a year later) receiving multiple bills from multiple separate businesses for sub services performed under the original business. Don’t forget there are now “late” charges on these bills, and these are the first bills you have ever received.
Not only that but why in the case of x-rays/MRIs and such are the patients billed for a second opinion? In other words the patient pays for a second opinion from the outside radiologist to confirm or deny the doctors findings. If the doctor doesn’t know what they are seeing then why am I paying them? If they want the confirmation to cover their concerns, why is the patient paying for it? I know my kid broke their arm, I don’t need a second bill/opinion to confirm that…..
Then there are the multiple bills for same service. Kind of like buying one diamond ring and then getting charged three times for the same ring. It is all a con-game of shells.
This is not even talking about the insurance companies side of denials, overcharges, and slow pays. If the insurance company wants, and often does, it can deny any claim. The worst case scenario for them is they end up paying the full amount required by law if they are forced. The insurance company can slow play, or even just refuse long enough, the likelihood of the insured giving up or even dyeing are very high.
Then there are all the rules, on what’s covered, not covered, not specifically addressed and now arbitration clauses… Just try to preplan for a medical service, there are no comprehensive estimates, nor any easily understood directories, or even insured independent advocates whom can help you navigate the systems.
Help is a four letter word, and isn’t free.
Strange thought, are all of those unpaid medical bills that this charity are covering actually for specific minority groups?
The way medical costs operate now days you need a lawyer and an accountant to make sense of it all.
My own experiences with our local hospital and medical staffs has been outstanding. And I agree with Scott and Bill completely in their comments. I’ve lived through bills greater than any of you mentioned and was treated so well by those who managed my accounts. I was indeed quite grateful for their care, both medically and personally. But there is no way to overstate the mental weight that came with the processes involved in walking through the assistance programs. If recovering from a devastating medical issue wasn’t enough on it’s own, mucking through the process is enough to drive nearly anyone into dispair. And I am both capable and generally upbeat, even through hard circumstances.
It did my heart good simply listening to the three of you discuss this.
Well, it just so happens that I just went through this. December 2020, on my birthday, it was confirmed that I had prostate cancer and in January had to begin “the process”. MRI’s, CT scans, Bone Scans, Biopsy, blood work, more examinations, and decisions to make – radiation or surgery?
Fortunate that my employer offers good health insurance options. The bills began to roll in January, Feburary, March….April and I had surgery in the last week of May. I’m in the recovery process now. (Relieved, happy, thankful for a skilled surgeon, exhausted and incredibly bored, can’t wait to get back to work)
What I learned as I went through all of this was that I had to ‘manage’ my own healthcare, no one was going to do it for me. Coordinating doctor visits, proceedures and followups was pretty easy, for with my condition I was not injured, sick or in pain. But still, I’d have to manage that AND then make sure my insurance company was staying on top of my bills and proceedures and responding back to the healcare providers in a timely basis. Many times I’d catch the major insurance company making some mistakes which could have cost me thousands more. Countless hours on the phone with that insurance co, talking with rep after rep, waiting on hold forever, to straighten things like whether a provider was actually in their network or not.
I came out of this experience with the feeling that managing a major event like this takes time, communication skill, healthcare saavy and being tenatious. I also began to think of others who may not have the ability to deal with this because of their emotional state, or lack of education or lack of communication skills, or simply too intimidated by all of the paperwork, people and processes. How do the less fortunate deal with all of this?
To the topic of financial assistance, upon 1st checking in with the Hospital famous for the marketing phrase “Hello Humankindness” for my 1st bone scan proceedure, the woman processing my information, once it was all in the computer, said to me, “Now, you have a copay up front of X thousand dollars. Would you like us to set up a payment plan for you? We have many programs available to you for financial help”. I said no, and flipped her my HSA card and paid for the bill right there. But it did make me feel good that this particular hospital chain did make the effort, face to face with me, to offer any financial assistance or program information to me.
OK, this story is probably incomplete as to the numbers … more in a minute.
But first, I am looking for the charity that will donate new (or even used) Porsche Boxsters to people who were previous Porsche owners. I ended up with 3 different Porsche 912’s in my first year of grad school, but then got drafted, grew up, etc. and found such cars are nice but not essential (or even really very practical at all.) But I’m retired now, so I want to retrograde my maturity — can anyone help? 🙂
OK, did I mention that grad school was in an engineering (aka nerd) program. So take 82,000 patients, multiply by at least $10,000 in bills per patient (on average, as a guess), giving you a total amount due of $820 million. The charity comes along and says, hey, we will reduce or remove the burden on those patients as part of our charitable mission if you agree to negotiate a more realistic amount per bill, net, that will be considerably lower than you may initially have had to supply or apply, based on Medicare billing criteria, etc. etc. So $820M minus $37M already written off leaves $783M, and then the chain drops their “must have” amount down to $278M (or 35% of the original remaining amount). Getting something rather than nothing, or not continually attempting collection efforts, is still a win-win for all involved. Including the executives and managers at the charity, who may or may not be overpaid for the quality of outcomes that they achieve.
I endorse the charity working directly with the hospital chain because 1) they have some expertise on what medical things “should cost” and won’t be as easily bamboozled, and 2) it keeps the negotiations at a higher level overall among “the experts” rather than bothering the less financially adept patients. If the chain still does not come down enough, the charity can say “sorry we can’t come to an agreement” and then walk away to pay off someone else. There may be some tax benefits as well, but I suspect for this class of patients, the chain will not obtain any profit over costs and thus no taxable income for or from this group. I presume that they will in fact apply their loss here to counter their taxable gains elsewhere.
So, they’re still ending up pretty long.
3 – Regarding the money going to the hospital rather than the individuals. This could easily be a method on behalf of the charity to streamline things. Rather than finding a sending money to each individual is much more time consuming than to have a single, large transaction with the hospital system. Charities should try to ease their red tape burden. But I am skeptical that this is why.
St. Jude is still the best example of a charity hospital. They provide care and patients don’t get a bill. It’s all private money. Ronette’s service fraternity does fundraising throughout the year in support of St.Jude.
as harris/biden are so intent on raising taxes on both individual high earners and large businesses would it not be beneficial for hospital consortiums to transfer those potential taxable income credits to non-taxable charity contribution receivables?
2 – Like Bill, the RSAE family is well acquainted with hospital bills. Many years ago, Mrs. Ron was in a very bad accident. This was followed by a lengthy hospital stay, several surgeries, and months of rehab. (Mrs. Ron is doing quite well now. Thank you for your concerns!).
Now, I consider myself to be a bright person. I have advanced degrees in engineering and basic math is not a problem. Navigating the billing system of doctors and hospitals was one of the most difficult task I have undertaken. Even allowing for my state of mind at the time we received bills from:
Hospital
Primary ER doctor
Surgeon
Anesthesiologist
Rehab center
Along with forms from the insurance company stating what was allowed, what they would pay, what we owed.
Since this wrapped around a calendar year, the clock restarted on deductible and copays.
The final total for what we owed was more than we paid for our house.
After many, many dear deadbeat letters, I spent an afternoon at the hospital with one of their billing folks to set up a payment plan. They went through options for us, and seemed very willing to do so. But it wasn’t until I asked. At no time did they proactively let me know of any options. They just sent form letter after form letter trying to squeeze blood from the stone.
One would think that during the many afternoons and evenings sitting by my wife’s side our patient advocate would have had on her checklist the idea of paying for all of this. It wasn’t a secret.
The patient in the next room in ICU was a farmer without insurance. They staff knew that and he received great care.
The system is broken, but I think it is broken due to too much government red tape, because no sane person would set their company up so that their customers were so ill-informed.
Ooh, boy. Where to start with this. I am going to channel my Fluffy Goat and post multiple comments else this will be a missive to challenge ACTS when he gets fired up.
1- The people who will benefit to the efforts of this charity are those who went to the hospital for treatment. As Bill pointed out, there are people who choose not to get treatment because they know they can’t afford it.
So, while it is good that this charity is helping people, I have a large problem with the hospital system (and our horrible media) for not letting people know that (as Scott stated) that no one will be turned away from medical care, regardless of ability to pay in this country.
One of our local hospitals is well known to have this practice. If someone in my family needs ER treatment, we don’t go there as it is packed with people who just need a clinic.
Steve is right about giving some people money and it not helping them. However, medical debt is different. Unless the person does something stupid, the problem is not their fault. Personal example: Three things that happened to my wife. Number one happened before we were married. She was in a crosswalk walking in the green, when a panel florist truck ran the red light, turned and hit her. Result: herniated disk in back and neck, head trama, and general arthritis that led to one knee being replaced, and the other yet to be. She got a settlement from the driver, but could not work for years and the settlement was way too low. Number 2 , uterine cancer last September. Still paying that bill off. Number three was this past March . She got her first Moderna vaccine shot and went into acute renal failure about a week later. Almost died. Over 2 weeks in hospital, followed by 4 weeks of dialysis three times a week. That bill has not hit yet. It will be difficult to pay. Also she cannot now take anti inflammatories, and is in constant pain. Yes, the reaction was reported to the CDC, and no, she will not get her second. Doctor says it will kill her. My research shows her coverage would be about 60%-80% vs Covid. However , I was angry no-one ever cited the bit about the CDC “not recommending the vaccine to people with cancer.” Did not say “recommend not getting the vaccine.,” The doctor said in her case, not knowing the end result of the vaccine, would have said to do it, since they were pretty sure they got it all. Knowing that, but not the result, we probably would have gotten it, but still would have liked being informed.
always follow the money. if the money is given to the debtor to pay the hospital, that will be taxable income for the hospital. if the money is given to the hospital (s) as a charity donation, that will mostly (if not all) be non-taxable. it would be interesting to see who at rip medical debt leads the way and to whom at the hospital conglomerate they work through and with.
sort of like thomas donilon, catherine m. russell, their daughter sarah donilon and thomas’s brother mike donilon. think biden, blackrock (yes THAT blackrock), advisor to the president, director of the biden whitehouse personnel office and a certain member of the national security council for this administration. color me skeptical…with all due respect to bill, scott and steve.