‘I just kind of panicked’: Patients confused as hospitals file liens to recoup costs of treating injured uninsured | Milwaukee Neighborhood News Service
Bram Sable-Smith (Wisconsin Watch/WPR)
December 24, 2020
ManeishaGaston was driving west on Milwaukee’s Brown Street with her 15-year-old sonwhen another driver blew through a stop sign, crashed into the passenger sideof her car and fled the scene.
“Thewhole door was crushed like a piece of paper,” Gaston recalled of the Octoberincident.
Gaston,43, needed help from her son and police officers to escape the totaled car. Sheand her son suffered injuries, which she declined to detail beyond a welt onher head  from a flying rearview mirror.
Gastondeclined treatment from paramedics at the scene. Instead, her mother came todrive Gaston and her son to the emergency room at Froedtert Hospital inMilwaukee. Gaston, who lacks health insurance, recalled waiting nearly twohours before receiving an X-ray, ibuprofen, Tylenol and advice to follow upwith her doctor.
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Threeweeks later, she learned by certified mail that the hospital filed a $2,314.98lien against her and one against her son for $1,044.34 — to cover her billfrom the visit. But what did that mean?
Gastoninitially worried the lien was filed against the home she proudly purchasedthree years ago on Milwaukee’s North Side. That was not the case. Instead thelegal filing would reduce compensation she might receive from anaccident-related lawsuit — if one is filed.
“Theyjust sent me this bill saying that they were going to put a lien on my name,and I just kind of panicked,” Gaston said. “I had to seek some advice.”
Froedtertis increasingly lining up for a cut of compensation in injury lawsuits byfiling liens. The filings come as the hospital delivers on a promise to stopdirectly suing patients over debt during the COVID-19 pandemic.
InApril, Froedtert dropped more than a
dozen debt lawsuits after a Wisconsin Watch/WPR
investigation revealed the hospital and others in Wisconsin were suing patientsduring the pandemic who struggled to pay medical bills. Froedtert vowed tosuspend such small claims suits. The hospital has followed through on thatpromise — while filing more liens against patients. Some hospitals elsewhere,including Froedtert South in Kenosha, are continuing to sue patients over alleged debt, a moreaggressive tactic that can damage credit histories.
Froedtertfiled 362 hospital liens through Dec. 11 of this year, including 251 since May.That outpaces the 300 liens it filed in all of 2019.
StephenSchooff, a spokesman for Froedtert Health, said the hospital’s volume of lienfilings “aligns with the number of Froedtert Health hospital cases resultingfrom auto accidents.”
Indeed,Milwaukee County this year has seen an increase in
serious car crashes, even during a pandemic that has limited traffic.
“FroedtertHealth follows the process for filing liens as set forth in the WisconsinHospital Lien Statute and only files liens to collect from third partysettlements,” Schooff added in an email.
Thepractice also happens at nonprofit hospitals in Wisconsin. SSM Health, whichowns hospitals and clinics across Wisconsin, filed at least 116 liens this yearthough Dec. 11, court records show. UW Health in Madison filed at least 67,while La Crosse-based Gundersen Health System filed at least 49. Aspirus WausauHospital filed at least another 13 liens.
“Hospitalsattempt to balance their responsibility to be good stewards of resources toensure they can best serve their communities,” said Kelly Lietz, a WisconsinHospital Association spokesman. “Hospitals prefer not to go to court or fileliens, so those actions really are a last resort, taken only after all otheroptions are exhausted.”
ThomasRussell, a UW Health spokesman, said hospital liens are “very rare and onlyapply in the case of a personal injury settlement.”
Butfiling a lien without explanation can leave patients confused.
“Theirimmediate thought is — like when someone files a lien on your house, orthey’re going to garnish your wages, said Lance Trollop, a personal injuryattorney in Wausau. “It’s scary when you have all this coming at you at once,with medical bills and insurance calls and forms.”
Lienscan siphon off large portions of a patient’s injury compensation. And thatpayment is typically more than a hospital would collect from an insurer for thesame care.
Consumeradvocates say the process illustrates one way that the American health caresystem leaves uninsured patients on the hook for “fictional” health care pricesthat don’t reflect the actual cost of care.
How liens work
Gastonfits the typical profile of people facing hospital liens, experts say:uninsured patients who have been injured in car crashes, although liens couldalso be filed in other cases involving negligence or wrongful conduct.
Unpaidmedical debts can take years to evolve into a small claims court lawsuit.Liens, on the other hand, happen relatively quickly. Hospitals must file themwithin 60 days after discharging the injured person, according to Wisconsin
law,which limits lien filings to charitable hospitals. Because of the strict legaldeadline, some health care industry lawyers encourage hospitals to file liens even beforelearning a patient’s insurance information.
Inthe event of a legal settlement over an injury, hospitals get paid before thedischarged patient.
Wisconsinhospitals mostly file liens against people involved in car crashes because theyare easier to file, says Trollop. Crashes typically generate a police reportwith the names of the people involved, their insurance companies and otheruseful information. Those cases are also more likely to yield a payout, Trollopadded.
Lienrecipients usually lack insurance, but hospitals treating some publicly insuredpatients — those enrolled in Medicare, for example — may choosewhether to bill the public insurer or file a potentially more lucrative lien.
Ifa patient does not file a lawsuit over their injuries hospitals can still tryto collect a debt in other ways — including by suing the patient, Trollopsaid.
Howmuch would Gaston owe if Froedtert pursued payment outside of the lien? That’snot clear. But possibly very little if she applied for charity care.
Likeother nonprofit hospitals, Froedtert offers a charity care
program— part of its  commitment as anonprofit to serve the community in exchange for tax breaks and other benefits.Patients who earn up to two and a half times the federal poverty level couldqualify for free care under the program, while patients above that thresholdmay be eligible for discounts of 65- to 90% on a sliding scale.
Froedtertdebts resolved through an injury settlement are ineligible for charity care,Schoof said.
Gastondescribed her earnings as a business analyst as “just a little above” the$43,100 annual limit for she and her son to qualify for free care as a familyof two.
Whenshe visited Froedtert in October, Gaston said someone gave her informationabout the hospital’s financial assistance policy and told her someone wouldcall about her billing options. Gaston did get a voicemail about billing. Shereceived the hospital liens a week or two later, she said.
How much does a patient owe?
Infiling roughly $3,300 in liens against Gaston and her son, Froedtert is likelyseeking to recoup “chargemaster prices” — sticker prices for medical care.
“It’sbeen my experience in defending hospital lawsuits that it’s difficult forhospitals to prove reasonable value of their services,” said Mary Fons, aconsumer protection attorney in Stoughton. “They just have their prices.”
NicholasBagley, a University of Michigan law professor, described chargemaster pricesas “basically fictions” that should serve as the starting point for costnegotiations.
“Insurancecompanies are supposed to be our agents,” Bagley said.  “And they’re supposed to negotiate hard withthese big hospital systems to come up with reasonable rates for the servicesthey provide.”
Thearrangement works for insurers, he added, because the companies hold leverageover hospitals and clinics; they pay health care bills of many patients and canthreaten to exclude hospitals and providers from their networks. But thatprocess breaks down for the poor and uninsured, sticking them with a “fictionalfee” for care.
Individualpatients — even those with attorneys — lack the bargaining power of aninsurance company. Trollop, the Wausau attorney, said hospitals have noobligation to budge, although sometimes they do.
JamesPayne, a personal injury attorney in Kenosha, said even a lien negotiated downto half price in a settlement will cost a patient more than private insurerswould pay for the same care — and far more than Medicare and Medicaidwould pay.
Somehospital liens can jeopardize an injury settlement, particularly if they arelarge, Trollop said. Settling makes little sense, for instance, if a hospitaldemands a sum near the cap that the at-fault driver’s insurance policy iswilling to pay.
“Myclient isn’t going to sign off on a settlement that only pays back the hospitallien,” Trollop said. “The uninsured person is going to walk away with lessmoney in the end.”
No lawsuit, but debt lingers
Afterconsidering her options with a lawyer, Gaston said she probably will not suethe driver who totaled her car. The driver doesn’t have car insurance, shesaid, adding that he might face a hit and run charge. Avoiding legal actionwould render the Froedtert lien moot. But her medical bills remain unpaid, andthat issue could take longer to resolve.
Gastonsaid she doesn’t have an extra $3,300 just sitting around, but she plans toprioritize the bill if necessary.
Schooff,the Froedtert spokesman, said a lien rendered moot by a lack of a lawsuit wouldnot preclude a patient from applying for charity care. (He could not responddirectly to Gaston’s case because of privacy considerations.)
“FroedtertHealth continues to work with patients related to financial counseling andallows patients with financial hardship who are on a payment plan to deferpayments while financial assistance is discussed with them,” he wrote in anemail.
Asshe sorts out the aftermath of her collision, Gaston is also recovering fromCOVID-19, which she caught a few weeks before Thanksgiving.
Aftershe emerged from 10 days of isolation, Gaston learned that her grandmother diedfrom conditions unrelated to COVID-19, making a hard year even harder. She isnow taking solace in how funerals bring families together.
TheDepartment of Financial Institutions offers general advice to debtors here,and residents may file a complaint here.
Theagency’s Office of Consumer Affairs can be reached at 800-452-3328 or608-264-7969.
ABC for Healthalso assists Wisconsin residents who have problems with medical debt or otherissues. You can reach the organization at 608-261-6939.
Legal Action of Wisconsin,a nonprofit public interest law firm, is also offering a range of assistance tolow-income people struggling with debt or other issues during the COVID-19crisis. You can call 855-947-2529.
This story comes from a partnership of Wisconsin Watch and WPR. Bram Sable-Smith is WPR’s Mike Simonson Memorial Investigative Reporting Fellow embedded in the newsroom of Wisconsin Watch (wisconsinwatch.org), which collaborates with WPR, PBS Wisconsin, other news media and the University of Wisconsin-Madison School of Journalism and Mass Communication. All works created, published, posted or disseminated by Wisconsin Watch do not necessarily reflect the views or opinions of UW-Madison or any of its affiliates.