Governor proposes change after syracuse.com reporting on medical debt lawsuits (Letter from the Editor)

David Smith, a tow truck driver from West Monroe, Oswego County, stands with his prosthetic leg next to his truck outside his residence on county Route 37.

Dear reader,

In December, syracuse.com | Post-Standard health care reporter Doug Dowty introduced us to several Central New Yorkers hit with lawsuits by Upstate Medical University for unpaid medical bills. While many hospitals nationwide have stopped suing patients over medical debt, state-run hospitals like Upstate have continued to haul often poor and sometimes terminally ill patients into court over unpaid bills.

“As a longtime court reporter, I saw first-hand the hundreds of lawsuits the state-owned Upstate University Hospital filed each year against its own residents. When I became a health care reporter in June of 2023, I realized quickly that many others in our community were seeking change, too. The state’s practice of suing its own residents for medical debt was becoming more and more out of touch with what the private sector was doing,” Doug told me.

His article was full of heartbreaking tales: A truck driver who lost a leg to diabetes is being sued for $11,000 as the disease threatens to take his other leg. A Mattydale mechanic dying of pancreatic cancer being hounded for the unpaid bills while on his deathbed.

“I identified more than 30 people who seemed like they had compelling stories to tell. I also turned to grassroots groups who had spent years trying to find the same group of people,” Doug said. “Those featured in the story were among the brave few. None of them benefited from their participation in the story. But they came forward, as one told me, in an effort to save others from the same pain in the future. Their bravery, I believe, helped bring about change.”

Doug’s investigation found that the state’s Upstate and Community hospitals have sued 4,000 patients since 2020, while the two private hospital in town haven’t sued anyone. Doug also found the state’s debt-collection lawsuit operation is aggressive but ineffective. For every $1 Upstate refers for legal action, the hospital recoups 14 cents, the data showed.

“That amounts to a few million each year for a teaching hospital with a budget of $1.5 billion. If you subtract the salaries of state lawyers who filed 1,500 lawsuits a year, the actual benefit is incredibly small. What can’t be quantified is the pain and crushing debt that these lawsuits have on people who get sick and literally have no way to pay their medical bills,” Doug said.

State officials have long said their hands are tied over this issue because of a 30-year-old so-called “budget directive” that requires the attorney general’s office to take action on any overdue medical bill of $2,500 or more. They gave Doug the same answer when he contacted them for this story. But just a few weeks later in her budget proposal, Gov. Kathy Hochul said the state could do away with that budget rule.

“In its place, Gov. Hochul wants a law that would allow lawsuits for only those making more than 400% of the poverty line. It’s the latest in Hochul’s years-long effort to reform how hospitals chase medical debt in the state,” Doug said. “After her announcement, Upstate told syracuse.com that it was suspending all new medical debt lawsuits as the governor’s proposal plays out. That has already spared dozens of people from lawsuits in one month.”

Medical debt is just one pain point in the health care system. Doug wants to tell your stories. If you have an idea or a tip, you can reach him directly at: [email protected]

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