Healthcare Blame Game: How Kaiser Health News mistook policy for practice in hospital collections report

Brad Dennison is a 25-year veteran of the newspaper industry. He served 15 years as the top news executive for multiple national organizations and led thousands of journalists across the U.S., including investigative teams. He’s also a past board member of the Associated Press Media Editors, where he was elected national chair. Dennison joined HFMA as chief content executive in 2019.

Data is a funny thing.

It can inform, tell a story, predict the future and drive improvement. If you’re patient and open-minded, you can read data like a good novel. Yet that same data can misinform, distract, mislead and feed your own narrative, unintentionally or otherwise.

As a longtime news media executive now four years-plus into healthcare finance, I’m taken aback at times by conclusions drawn by the media and other organizations. While generally rooted in a reality we all know exists, reporters can get caught in their own thesis regardless of what the data says. This is then supported by extreme anecdotes used to paint an entire industry.

In my new blog – “The Healthcare Blame Game” – I’ll be dissecting recent media stories and other reports that may not be so impartial. I’ll be judging them on two key criteria any reporter and editor must be judged by: Accuracy and bias.

And let me be clear: I’m not here to exonerate anyone in the U.S. healthcare ecosystem from the scrutiny of media or public opinion when the right thing isn’t being done for the consumer. Issues abound. Rather, my goal is to demonstrate how healthcare finance really works in contrast to media reports that fall short.

Welcome to the “Healthcare Blame Game.”

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Headline: Many hospitals sue patients for debt or threaten their credit
Source: Kaiser Health News
Reporter: Noam Levey
Published: Dec. 21, 2022

KHN recently did an investigative report on how 528 hospitals “use aggressive practices to collect on unpaid medical bills.” It goes on to say that more than two-thirds have policies that allow them to sue patients or take other legal action.

KHN’s methodology was to scour community hospital websites for billing and collection practices. If none were found, the research team contacted the hospital for more information. Ultimately, KHN gathered information on 528 U.S. hospitals’ policies and created collections scorecards with a green-is-good and red-is-bad system based on four criteria:

• “Credit reporting not allowed”
• “Selling patient debt not allowed”
• “Denying care not allowed”
• “Legal action not allowed”

The database entitled, “Will your hospital help you with your bill? Will it sue you?” allows readers to search for their local hospital (about 10% of U.S. hospitals are included). This is followed by statements presented as certainties based on those policies:

• “More than two-thirds sue patients or take legal action.”
• “Two-thirds report patients to credit agencies.”
• “A quarter sell debt to collectors.”
• “About 1 in 5 deny nonemergency care if there is debt.”
• “Nearly 40% of all hospitals don’t tell you this on their websites.”

All of the information gathered funnels down to this statement: “The impact of these collection practices can be devastating.”

Flawed methodology

To be sure, the list of five actions above are things that occur. No patients who qualify for charity or discounted care should be missed in the patient financial communications process. Our peer review journal/news magazine hfm has covered the subject of “Collecting with compassion” recently and HFMA has led the way on patient financial communications best practices for many years. It’s an area where we provide significant guidance because it’s a real-world need.

However, KHN’s methodology is flawed from the start by using the five statements above as straight-up facts. Even in KHN’s own database, for example, UAB Hospital in Birmingham, Ala., has policies that allow for suing, but a spokesperson noted it was “allowed, but not current practice.”

And that’s the problem here – the very first hospital in the KHN database blows the theory that written policies are executed without subjective decision-making based on the merits of a number key factors. Anyone with business management experience knows this is not the case. Policies dictate what you can do, not what you will do.

KHN staff cannot accurately state or predict how policies will be applied in the real world.

There is no such regulation

One of the cornerstones of KHN’s investigation is the idea that hospitals should have collections and financial assistance policies available on their websites. HFMA has suggested this for years. That said, there is no such requirement of hospitals.

As part of IRS 501r regulations, hospitals are required to make available financial assistance policies. There are three visibility requirements, including language on documents in the intake or discharge process, visible written notices and “conspicuous public displays.” The only website requirement is that the financial assistance policy forms be available online. HFMA offers guidance on this issue, but in short, it’s about making the patient aware of policies when they are in the situation.

KHN talks about seeking out such forms and notes they are often buried deep in the website, but doesn’t note that patients are likely being directed to this URL from their intake or discharge paperwork, where it is required to exist.

While more direct access to policies and forms would absolutely be best for the patient – and some organizations do a better job than others – the actual federal rules are limited.

Bias and ambiguity

Good journalism is specific. Words and phrases like “many,” “suggests,” “extremely complicated” are simultaneously ambiguous and devoid of facts, and found throughout this KHN report. There’s an accusation that hospitals “effectively shroud their collection activities,” which implies intent that is not supported in the story.

We also get this quote from a representative of Dollar For, a medical debt relief nonprofit: “Patients can’t find the information they need. Half the time, when they do apply for assistance, they never hear back. Basically, hospitals do what they want, and there is no accountability.” This is used to support the narrative, but in no way is “can’t find,” “half the time,” “never hear back,” “do what they want,” and “no accountability” verifiable.

Conclusion

Ultimately, KHN never delivers on its headline, “Many U.S. hospitals sue patients for debt or threaten credit” because it created an exercise based solely on policy rather than actual business practice. (We made multiple requests to KHN regarding its methodology, but didn’t receive a response.)

In fact, near the very end of the KHN article comes this: “Officials at many hospitals that sue say they rarely take that step. And spokespeople at several medical systems said they have effectively stopped taking patients to court even if their policies still allow it. But in many cases, hospital policies haven’t changed, leaving patients in legal jeopardy …”

There’s much I could unpack there (and will do so in the upcoming pilot episode of the “Healthcare Blame Game” podcast), but let me simply ask: Why isn’t the story, “More hospitals abandoning the practice of suing patients”? Or at least, “More hospitals abandon the practice of suing patients despite policies.”

Perhaps it just didn’t fit the narrative.

Do you have comments on this blog or ideas for future blogs? Contact HFMA Chief Content Executive Brad Dennison at [email protected].

Research support provided by HFMA Senior Editor Paul Barr, a former Modern Healthcare editor; Senior Editor Erika Grotto, producer of our award-winning “Voices in Healthcare Finance” podcast and a former newspaper reporter; policy director Andrew Donahue, a former policy advisor on Capitol Hill and former hospital finance executive; and policy director Todd Nelson, former hospital finance executive.