Hospitals Suing Patients For Medical Debt

WASHINGTON (SOA) — Medical debt is an epidemic in America, impacting nearly 100 million people nationwide. That’s about four out of ten adults. As Spotlight on America discovered, it’s a problem complicated by aggressive collection practices, despite medical bills often riddled with mistakes.

Damon Carson was among thousands of patients sued over the past several years by UCHealth, one of Colorado’s largest healthcare systems.

“It was a very frustrating experience dealing with big business and big medicine,” Carson told Spotlight’s Angie Moreschi.

Damon and his wife Traci were surprised to get a bill from UCHealth for nearly $5000 after Damon got an estimate for just about $1500 for an endoscopy to address a swallowing issue. The day of the procedure, he paid the estimated amount in advance, so when the bigger bill came, he felt blindsided.

“I feel like there was not full disclosure on what this procedure could end up costing, and I just thought it was kind of unfair business practices,” he said.

Making matters worse, they say the bills were hard to follow—even for Traci, who is an accountant.

“It was very confusing to even understand what we had paid, which was for the procedure. (But then) It was being applied to different places. So, nothing made sense, even just to look at it,” Traci explained. “As an accountant, certainly, I probably understand it more than most, but when you’re going in with medical stuff, you shouldn’t have to be an accountant in order to figure out what you’re being charged.”

Upset by what he saw as a lack of pricing transparency, Damon decided to take a stand and refused to pay the extra amount.

“Stuck my foot in the ground, if you will, and just said, ‘I don’t think this was fair. I called around. I got the estimates. I am not going to pay this.’”

A few months later, they were hit with a lawsuit from a collection agency suing on behalf of the hospital.

Hospitals suing patients

George Washington University law professor Barak Richman calls medical debt a crisis in America, complicated by the convoluted billing structure used by medical providers.

“I think everybody in America has gotten a medical bill that they don’t understand. In fact, it’d be hard to find an American who gets in medical bill they do understand,” Richman told Spotlight.

He has studied aggressive collection practices by healthcare providers in five states, North Carolina, New York, Virginia, Wisconsin, and Colorado, and says the practice of hospitals suing patients is more common than you might think.

A Kaiser Family Foundation investigation found more than two-thirds of hospitals have policies allowing the use of aggressive collections practices – including lawsuits and other legal actions, like garnishing wages or placing liens on property.

“I think this is deeply unfair to patients, and it’s among the biggest problems in current healthcare policy,” Richman said. “We’re charging too much for healthcare. We’re not telling people how much those prices are. They get into debt accidentally, and very often when they get into debt, they get into a cycle that’s really harmful.”

Richman’s most recent study, Hospitals Suing Patients: The Rise of Stealth Intermediaries, examined how common it was for Colorado hospitals to sue patients for medical debt. It was done in conjunction with GW Law, Stanford Medicine, and Patient Rights Advocate.org.

“We asked the simple question: How many hospitals are suing patients to collect on medical debt?” Richman said. “The number is high. Not all hospitals sue, but the ones that do sue do sue disproportionately more than others.”

Complicating matters even more for patients, research shows that medical bills are often riddled with errors. A Gitnux study published in April 2025 found 80-percent of medical bills contain mistakes.

“An extraordinary percentage, a shocking percentage of medical bills are just wrong,” Richman said.

Rise of Stealth Intermediaries

Richman’s study documented the tactic of hospitals using third-party collection agencies to sue patients for medical debt on their behalf. The report called it using “stealth intermediaries,” because it essentially keeps a hospital’s name off of a lawsuit.

He calls it a troubling practice and believes it’s used to protect a hospital’s reputation.

“Hospitals are very sensitive about their public image. And suing patients is a bad look,” he said. “We call them stealth intermediaries for a reason. They’re using these intermediaries to hide themselves.”

The study found UCHealth was among the most litigious in Colorado when it came to suing patients and using third party debt collectors. A total of 12,722 debt collection lawsuits were initiated against patients, like Damon Carson, from 2019 to 2023.

“I was at home. They came to the door and handed me the paperwork,” Traci Carson remembered, describing the day they were served the lawsuit. “It just came from a collection center, and it didn’t have a whole lot of information. At first, I really didn’t know what it was for.”

The research found that using third-party collection agencies to sue often created confusion for patients and magnified the consequences, leading to default judgments against them.

“Patients don’t know they’re being sued; they might get letters, but they don’t understand it. They certainly don’t show up for court, and they suddenly have a judgment against them,” Richman explained.

Following sharp criticism of the practice after it became public, Colorado took action to require more transparency for hospitals when suing patients. The Colorado General Assembly passed a new state law last year, requiring hospitals to include their names on suits against patients.

Spotlight contacted UCHealth to request a comment for this report, but the hospital chose not to respond.

For the Carsons, the whole ordeal finally came to an end with they ended up settling their case with UCHealth. They paid a reduced amount, but still more than the original estimate for Damon’s endoscopy.

“At every turn you have to advocate for yourself. And they don’t make it easy for you to do that,” Traci Carson said.

Call for more price transparency

Cynthia Fisher is Founder and Chair of PatientRightsAdvocate.org and fights to get more price transparency for patients.

“In order to have a leg to stand on when medical bills come in, you need to know what those prices are,” Fisher said. “Then you’re protected when the bill comes and there’s a mistake or has overcharges.”

In 2020, Congress passed the No Surprises Act, which requires hospitals to post their prices for common procedures. It took effect in January of 2022, but Fisher says many medical providers are still not doing it or using complicated algorithms that make it impossible for patients to understand true pricing.

She’s now calling for the law to be updated to require real dollars and cents numbers to make it easier for patients to compare costs.

“We need to have the curtain pulled back on all of this,” she said. “It (price transparency) works in every other market in our economy. There is no other place where we don’t have prices before we make a purchase.”

A new bipartisan bill to create more price transparency for medical costs was just introduced in the Senate in July. The Patients Deserve Price Tags Act would require all negotiated rates with insurance and cash prices between plans and providers to be accessible.

How to fight a medical bill

If you believe you were overcharged on a medical bill, PatientRightsAdvocate.org has a step-by-step process to follow to help you fight back.

1. Request an itemized bill and dispute inaccuracies.
2. Ask to see the contract.
3. Research the actual price posted by the hospital.
4. Research other prices and use them to negotiate.
5. Address out-of-network services and refuse to pay for inappropriate care.
6. Call your insurance company.
7. Call your employer’s head of Human Resources department.
8. Write to your hospital’s leadership.

For more detailed information on how to fight a medical bill, you can visit PatientRightsAdvocate.org