A health care giant sold off dozens of hospitals — but continued suing patients

Tennova Healthcare-Lebanon doesn’t exist anymore as a hospital. But it still sued Hope Cantwell.

A knock came on the door of Cantwell’s Nashville, Tennessee, apartment early this year. She said she hadn’t been vaccinated against covid-19 yet and wasn’t answering the door to strangers. So she didn’t.

But then several more attempts came over the course of a week. Eventually she masked up and opened. A legal assistant served her a lawsuit; she was summoned to appear in court.

“I couldn’t believe someone — someone? a corporation? a company? — was doing this during a pandemic,” Cantwell said.

It started with a hospital visit in May 2019.

Cantwell was admitted for a short stay at Tennova Healthcare-Lebanon, owned at the time by Community Health Systems, a publicly traded company headquartered in Franklin, Tennessee. Her insurance covered most of the stay, but it still left her with $2,700 to pay.

Nearly a year later, she was in a financial position to start chipping away at the bill. She went online to pay but couldn’t find the hospital or its payment portal.

Cantwell did a little Googling and noticed Vanderbilt University Medical Center bought the 245-bed facility around the time of her stay. It’s called Vanderbilt Wilson County Hospital now.

Then the pandemic hit. She was furloughed from work for three months. And soon after, a letter arrived. A law firm representing the former hospital owner demanded payment and threatened to take her to court. She wasn’t sure what to do, since she couldn’t come up with all the cash. She was in a holding pattern until the knock on the door from the legal assistant.

Pandemic push

A WPLN News investigation found Tennova Healthcare-Lebanon sued more than 1,000 patients, including Cantwell, over the past two years across multiple counties after striking a deal to be sold. And hundreds of those suits were filed during the pandemic, at a time when many companies have backed away from taking patients to court over unpaid medical debt. The state of New York banned the practice.

Community Health Systems is on the tail end of a corporate downsizing that shrank the company from more than 200 hospitals to 84. The sell-off helped stabilize the company after it took on massive debt during a period of rapid growth that briefly gave Community Health Systems more hospitals than any other chain in the country.

But now many of those institutions are like zombie hospitals — little more than a legal entity still taking patients to court even after being sold to new owners that don’t sue over medical bills.

When her summons arrived, panic set in for Cantwell.

“My mind went immediately to the stimulus payments,” she said. “‘At least I have a way to take care of this now.'”

When her final pandemic stimulus money dropped into her bank account, Cantwell said, she sent it straight to the company that had sued her, even though she almost felt like the victim of a scam. She wondered if she really owed all the money or if she qualified for financial assistance since she lost income during the pandemic.

But lawsuits are a rich man’s game. She couldn’t justify trying to find an attorney or fighting a big for-profit company that would pursue her for $2,700.

“I don’t have the resources and emotional and mental capacity to handle anything more than just kind of rolling over and handing over whatever amount of money they would be happy with,” she said.

Community health systems’ debt problem

Court records indicate Community Health Systems stepped up filing lawsuits against patients in 2015 at the same time its stock price plummeted over concerns about its outsize corporate debt.

Aside from a hospital fire sale, Community Health Systems also aggressively went after patients. And the company didn’t let the pandemic slow that plan, even though it received more than $700 million from the federal government in covid relief money.

A spokesperson for HCA Healthcare, the largest for-profit hospital chain in the country, said its hospitals do not sue patients over unpaid medical debt — during the pandemic or otherwise. The Nashville-based corporation returned all its covid relief funds.

An investigation by CNN found Community Health Systems sued at least 19,000 patients during the pandemic, though the number is likely an undercount given the lawsuits filed on behalf of its former hospitals.

Like Tennova Healthcare-Lebanon, two other Community Health Systems hospitals in Tennessee also continued taking patients to court after selling to Vanderbilt more recently. Community Health Systems held on to its debt in the deals with Vanderbilt and continues to pursue patients who owe it money.

Vanderbilt University Medical Center spokesperson John Howser said Vanderbilt does not sue patients to collect on medical debt.

“Community Health Systems and its subsidiary Tennova Healthcare is a private company that is not owned or operated by Vanderbilt University Medical Center,” Howser wrote in a statement. “As such, VUMC is not involved in these lawsuits.”

Vanderbilt University Medical Center does help run a Community Health Systems-owned hospital in Clarksville, Tennessee, that continues to sue patients, but Howser noted Community Health Systems has the controlling interest.

“The thing is, these aren’t rich people who don’t want to pay their bills,” said Christi Walsh, a nurse practitioner who directs clinical research at Johns Hopkins University. Her team focuses on hospitals suing patients and pressures them to stop. “I’ve been on the ground in the courthouses. These are people who don’t have the money to pay it.”

In Wilson County, Tennessee, a husband and wife were both sued by Tennova Healthcare-Lebanon. He works in a distribution center that shut down for months during the pandemic. She cared for their foster kids and delivered meals with DoorDash, telling WPLN News they were too busy to make their court date.

The problem is, not showing up to face a debt in court can allow a company to take a cut of someone’s paycheck. It also wrecks a person’s financial credit, and the stress can lead to health problems.

‘It threatens the public trust’

Walsh’s team researched the most litigious hospitals in Texas from 2018 to 2020. The top five were all affiliated with Community Health Systems. And the most lawsuits were filed by South Texas Regional Medical Center, which was sold to HCA in 2017. But South Texas Regional Medical Center continued to sue patients.

Marty Makary, a surgeon at Johns Hopkins who wrote a book about health care billing called “The Price We Pay,” said most hospitals have changed tactics. Suing their patients doesn’t make them tons of money after attorney and court fees, and it hurts their brand. But he said Community Health Systems has not expressed such concern.

“Community Health Systems, in all of our research of hospital pricing and billing practices, stands out as an aggressive institution that uniformly, across the country, engages in very aggressive predatory billing — suing patients in court to garnish their wages,” he said.

Even if Community Health Systems is willing to take a hit to its reputation, Makary said, patients think of the health system as a whole. And they’ll think twice next time they need to go to the doctor.

“It threatens the public trust in our community institutions. And medical institutions are supposed to be above those games,” he said.

In a statement to WPLN News, a Community Health Systems spokesperson said the company used its covid relief money to pay for pandemic expenses and make up for lost revenue. In January, the company said it will take patients to court only if they make at least twice the federal poverty level — or about $53,000 annually for a family of four.

“We continually evaluate modifications to our collection practices to support patients who struggle to pay their hospital bills,” spokesperson Rebecca Pitt said.

The policy change is meant to be retroactive. The company will withdraw litigation for anyone who qualifies, Pitt said. Patients who owe Community Health Systems and its former hospitals money are being made aware of the new policy in legal correspondence and can call 800-755-5152 to begin the process to drop a lawsuit, she said.

This story is from a reporting partnership that includes WPLN, NPR and KHN.

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.