October 30, 2003

Hospitals Try Extreme Measures
To Collect Their Overdue Debts
Patients Who Skip Hearings
On Bills Are Arrested;
It's a 'Body Attachment'

By LUCETTE LAGNADO
Staff Reporter of THE WALL STREET JOURNAL
http://online.wsj.com/article/0,,SB106745941349180300,00.html

CHAMPAIGN-URBANA, Ill. -- Late one night in June 2000, a police cruiser pulled up to Marlin Bushman's house on a quiet, tree-lined street. While Mr. Bushman's wife and son stood by, an officer handcuffed the burly truck driver and took him away to jail. The charge: missing a court hearing about a $579 hospital bill.

The hospital that pursued Mr. Bushman, a 295-bed not-for-profit facility called Carle Foundation Hospital, is one of several that has at times employed debt collection tactics that are shunned by many other creditors. It has filed hundreds of lawsuits, garnisheed patients' wages and seized their tax refunds. Since 1995, Carle, the primary teaching hospital of the University of Illinois, confirms it has also sought 164 arrest warrants for debtors who missed court hearings.

In one case, Carle went after an uninsured, part-time musician whom it had treated for a gunshot wound in a suicide attempt. When the man, James Bean, missed a hearing on his $7,718 hospital bill, Carle asked the court for an arrest warrant, and in November 2001 Mr. Bean landed in jail for several hours.

In another case, Carle obtained an arrest warrant for an uninsured single mother, Kara Atteberry, who missed two court hearings on a $1,678 debt she incurred for a miscarriage. Ms. Atteberry turned herself in to authorities in October 2001 and was briefly jailed before making a $100 bail payment. She now owes a total of $2,070 to Carle, including a bill for other treatments, and she expects to file for bankruptcy.

Some hospitals now rank among America's most aggressive debt-collectors, as they put increasing pressure on poor and uninsured patients to pay their bills. Adding to the problem, as The Wall Street Journal has reported, hospitals generally charge uninsured patients far more than the discounted rates negotiated by health-maintenance organizations and other private insurers and government agencies.

Some also use one of the harshest and least-known collections tactics of all: seeking the arrest of no-show debtors. A review of court records and interviews with hospital trade groups, collections attorneys and consumer advocates shows that hospitals in several states, including Connecticut, Indiana, Kansas, Michigan and Oklahoma, have secured the arrest and even jailing of patients who miss court hearings on their debts.

Tough Tactic

The legal tactic of arresting a debtor who fails to appear for a court hearing -- known in some areas as "body attachment" -- is so extreme that some of the country's biggest commercial creditors say they never use it. For instance, Sears, Roebuck & Co. and Ford Motor Credit Co., the finance arm of Ford Motor Co., say they expressly prohibit their collections agents from asking judges to issue arrest warrants against no-show debtors.

In many areas of the country, collections lawyers say, the procedure has been all but abandoned. Judges grant a creditor's request for a body attachment when someone misses one or more hearings or otherwise flouts a court's authority -- technically, it's not punishment for the debt itself.

In Connecticut, the state's largest hospital, Yale-New Haven, has obtained at least 65 civil arrest warrants in the past three years for debtors who have missed court hearings, according to an examination of New Haven County court records by a researcher for the Service Employees International Union, which represents some hospital workers. After several inquiries from the Journal, the hospital, which doesn't dispute the union's research, said it would severely limit the tactic.

In Champaign-Urbana, a county agency was so shocked by hospitals' debt-collection practices that it tried to strip Carle and another hospital of their tax exemptions as charitable institutions. The effort failed against Carle; the challenge to the other hospital, a 268-bed Catholic facility called Provena Covenant Medical Center, is pending. "This concept of debtor's prison, you read about it in Dickens, but it is still going on," says Laura Sandefur, a former member of the agency, the Champaign County Board of Review

The hospitals' pursuit of body attachments is surfacing at a time when many major U.S. medical centers are under fire for their billing and collections practices. In June, the American Hospital Association, the industry trade group, issued a memo urging its 4,800 members to examine their bill-collection practices and demand that their collections agencies and lawyers "treat your patients with dignity and respect."

Connecticut recently passed a law slashing interest rates that could be applied to hospital debt. In California, a bill that would have shielded patients from aggressive billing and collections was shelved this summer following heavy industry opposition. Illinois is holding hearings on how hospitals bill and collect from the uninsured. Meanwhile, Congress has launched an investigation into the practice of charging uninsured patients more than the discounted rates offered to insured patients.

Patient advocates argue there is a fundamental difference between medical debt and other types of consumer debt. "If it is a car or a vacuum cleaner, they will simply repossess it. What do you want them to do? Give the heart valve back?" says Jane Perkins, an attorney at the National Health Law Program in North Carolina.

For their part, hospitals say they are forced to recoup every dollar they can because health-care costs are soaring, and insurers and the government are cutting their reimbursements for services. Hospitals have also been squeezed by the rising numbers of the uninsured -- the total hit a record 43.6 million people this year -- who often don't pay their bills. Hospitals say they shouldn't be forced to bear the disproportionate financial burden of a national crisis.

"You can't solve the issue of millions of uninsured by simply turning to hospitals whose financial conditions are quite fragile and say, 'You do it,' " says Howard Peters, senior vice president of the Illinois Hospital Association, a trade group representing more than 200 institutions, including Carle and Provena Covenant.

Carle defends its debt-collection practices, emphasizing that body attachments are imposed by a judge as the legal result of a debtor's violating a court order. "We are not going door-to-door to put people in prison," says Carle's chief executive, James Leonard, 48, a family doctor who still occasionally practices medicine. "It is your choice to not show up in court."

In some cases, the debtors did appear for at least one court hearing. Ms. Atteberry says that when she did come to court, she was talked into accepting payment terms she couldn't afford -- including an order not to spend her tax-refund money. When the judge summoned her back, she didn't go because she feared "the whole hounding process" would start anew. "Who would want to show up?" she asks.

After inquiries from the Journal, Carle said it would permit its collections agencies to seek body attachments only after a review by a new, three-person committee consisting of two hospital employees and an outsider. Dr. Leonard says he still considers body attachments useful, but the panel will try to assess the "human story" behind each case. He says Carle, which handles 100,000 patient visits a year, goes to great lengths to serve Champaign's poor and uninsured, and has programs designed to provide discounted care. "We really are a microcosm of part of the struggle that is going on," Dr. Leonard says. "We are charged with sorting out who can afford to pay, who can't afford to pay. How do you set the rules?"

Carle says its policy is to refer bills to an outside collections agency once they are 100 days overdue. The hospital says it has authorized its collections agencies to pursue legal action on about 7,300 bills since 1995, but many of those cases were settled before a suit was filed. In response to inquiries from the Journal, the hospital searched its records from 1995 to 2003, and said it had obtained 164 body-attachment orders during that period. Carle said not all of the orders had resulted in arrests; some were vacated and others remain outstanding. The hospital wouldn't be more specific. It also said it has sought far fewer body attachments in recent years than previously.

Because Carle doesn't always file cases under its own name, the number of body attachment orders and arrests resulting from its collections lawsuits couldn't be independently confirmed. As recently as a few years ago, the hospital did file such cases under its own name, but since then suits against Carle debtors have increasingly been filed under the names of collections agencies. Gretchen Robbins, a Carle spokeswoman, says the hospital isn't trying to camouflage its legal activities, but rather its collections agencies increasingly file "consolidated" suits on behalf of multiple creditors, which she says is more efficient and cost-effective, saving court costs for both sides.

Mr. Bushman, the truck driver who was arrested in the middle of the night, has had a long struggle to pay his hospital bills. In a series of trips to the Carle emergency room over a period of five years, Mr. Bushman, who is diabetic, sought care for his wife and their three young sons. At times, the Bushmans were insured. Other times, they lacked coverage, or their insurance didn't cover the entire bill. They paid some of the Carle bills, but by late 1998, still owed $579 and had received several collections notices.

In February 1999, Carle filed a lawsuit in Champaign County Circuit Court seeking payment. Mr. Bushman appeared at a court hearing on the debt a month later. He says he couldn't afford a lawyer -- and in Illinois civil arrest cases, unlike criminal cases, the court isn't required to appoint one. At the hearing Mr. Bushman agreed to pay the full amount within a month, even though he says he wasn't sure he would have the money. After he failed to make the payment, the court ordered him to appear at another hearing at the end of April.

This time, he didn't show up. He says he was worried about losing a day's pay. He knew he was risking arrest, but he says, "I assumed I could probably take care of it later" and, besides, he says, he couldn't pay the debt. Mr. Bushman, who is now 40 and works as a mechanic, says he was "expecting some money from a tax return" but didn't get it.

The court, at the request of a lawyer for Carle's collections agency, ordered a body attachment. However, Mr. Bushman wasn't arrested right away. In Champaign County, body attachments are usually enforced only when an officer confronts someone for another incident or alleged offense.

About a year later, at 1:10 in the morning of June 13, 2000, Urbana police picked up Mr. Bushman's 16-year-old son for drinking and violating curfew laws, according to police records. When the officer brought the teenager home, his last name triggered an alert about the outstanding civil-arrest warrant against his father. Mr. Bushman's wife, Diane, remembers thinking, "You bring home my son and take away my husband?"

Mr. Bushman was booked and fingerprinted at the Champaign jail. He posed for a mug shot, turned over his shoelaces and was escorted to a cell. A judge imposed bail of $2,500 -- with $250 payable up front. Mr. Bushman waited in a cell while his wife tried to come up with the money. He says he fell asleep on the concrete bench, using a roll of toilet paper as a pillow. Ms. Bushman borrowed the money from her mother-in-law, and Mr. Bushman was freed a short time later. Within three months, he paid Carle the balance of his debt, and the case was dismissed.

Carle's chief financial officer, Robert Tonkinson, defends the use of a body attachment against Mr. Bushman. Mr. Tonkinson pointed out that Mr. Bushman had more than a year to pay his debt between the time the body attachment was imposed and the day he was arrested. "He landed in jail, and that is certainly where no one wanted him to be," Mr. Tonkinson says, "but I struggle with the personal responsibility on his part, and my responsibility as chief financial officer."

The use of body attachments -- known in some states as civil arrest warrants, bench warrants or writs of capias -- varies widely from state to state, and even from courtroom to courtroom, depending on such factors as the aggressiveness of local collections agencies and judicial sympathies. It isn't possible to determine how many hospitals nationwide use the procedure. In body-attachment proceedings, a collections lawyer acting on the creditor's behalf generally can request the arrest, which is then ordered by a judge.

Hospitals, industry trade groups, collection lawyers and consumer advocates in several states, including New York, Louisiana, Wisconsin and Texas, say they had never heard of hospitals seeking the arrest of no-show debtors. Laura Redoutey, president of the Nebraska Hospital Association, expresses shock at the tactic, and says she "can't fathom it has ever happened here." Stanley Brezenoff, president and chief executive of Continuum Health Partners, the elite New York hospital system that includes St. Lukes-Roosevelt and Beth Israel, says he has never heard of a New York hospital pursuing an arrest warrant related to a debt. "We are not in the business of replicating 'Les Miserables,' " he says.

Nonetheless, just last month in Evansville, Ind., the not-for-profit Deaconess Hospital sought the arrest of a 22-year-old debtor, Jamie Ruston, who had missed two court hearings on a $5,664 debt related to gynecological surgery. Ms. Ruston, who works at a McDonald's, was briefly in custody before her mother arrived at the jail with the $500 needed to secure her release. "I cried the whole time," Ms. Ruston says.

Alan Shovers, a lawyer for Deaconess, says the hospital, which is affiliated with the United Church of Christ, made "innumerable efforts to get in touch" with Ms. Ruston to work out a payment plan or to see if she qualified for charity care. "In the range of 16 times, she has ignored us, ignored the hospital, ignored the court house," Mr. Shovers says. He defends the hospital's use of bench warrants -- as the proceeding is known in Indiana -- saying the hospital seeks them only when debtors have been repeatedly unresponsive. "Most people, whether rich or poor or whatever, can to some degree respond to the system -- and you have some people who go through life without responding," he says. "The question is, are we taking some unfair advantage, and I don't think we are."

In Connecticut, one of the debtors pursued by Yale-New Haven hospital, John Franchi, 35, says a state marshal appeared at his East Haven home one Saturday morning last November and announced he was placing him under arrest and taking him to the local jail. "I have two little kids, and it was unbelievable," Mr. Franchi says. He was able to persuade the officer that he would appear court on his own the following Monday. "I didn't want to go to jail," he says. "I was terrified."

After appearing in court, Mr. Franchi, a warehouse supervisor, worked out a payment arrangement on his $3,978 debt for treatment he says was related to viral meningitis. He says the hospital is now garnisheeing a portion of his $14.50 hourly wages. "It is devastating me," Mr. Franchi says.

Yale-New Haven initially defended its use of writs of capias -- as the proceeding is called in Connecticut -- saying they were a useful way to compel recalcitrant debtors to appear. "If someone will be uncooperative and they ignore the legal system, what is the alternative?" said William Gedge, a Yale-New Haven hospital vice president. However, after inquiries from the Journal, Mr. Gedge said the hospital would severely limit the use of such warrants and would scrutinize each one that is sought.

Another debtor, Leslie Caplan Block of Newton, Conn., says she was home caring for her infant twins and 3-year-old daughter in September 2000 when two sheriffs' deputies arrived. They arrested her for missing a court date on a $9,454 debt she had incurred at Yale School of Medicine -- which is incorporated separately from Yale-New Haven hospital -- for surgery on one of her babies. After her father agreed to come over and watch the children, Ms. Block, now 34, was taken away in the back of the officers' car and was put in a holding cell while she awaited a judge. She was released after her husband paid $350 in bail money. "I was scared to death," she says. In the ensuing months, her debt swelled to $15,715, including interest and court costs.

Tom Conroy, a spokesman for Yale University, says the medical school has used writs of capias only as "a last resort." He says doctors at Yale medical school -- who care for patients at Yale-New Haven hospital -- don't inquire into a person's means before offering care. Mr. Conroy adds that the institution has vacated Ms. Block's debt.

In Champaign-Urbana, James Bean, the man who was treated at Carle hospital for a self-inflicted gunshot wound, says he has been pursued aggressively by a collections agent since 1995, when the hospital sued him over his $7,718 bill. In June 2001, Mr. Bean, who says he held a series of odd jobs during that period and couldn't afford a lawyer, missed a court hearing. He says he wasn't aware of the hearing. Carle's lawyer obtained a warrant for his arrest, and a few months later, Mr. Bean says, he heard about the warrant and turned himself in. Bail was set at $3,500, and he spent six hours in jail before his brother came up with the 10% required to release him.

Five months later, in April 2002, Mr. Bean missed another court hearing, which he also says he wasn't aware of, and Carle requested another body attachment. The judge granted it and set bail at $5,000, but the body attachment was then quashed, according to court records.

Mr. Bean, 44, has recovered from the shotgun wound to his neck and now works as a stage hand. He says he tried to kill himself because he was despondent over the breakup of his marriage. Since then, he made payments totaling $1,340 to Carle, but because of interest and court costs, his debt swelled to $10,345. "It has been a nightmare," he says. "Is there ever going to be an end to it?"

Ms. Robbins, the Carle spokeswoman, says the hospital acted appropriately after Mr. Bean had failed for years to pay his debt. The suicide attempt was in 1991, and Carle unsuccessfully tried to collect for more than four years before filing suit. She says the hospital also encouraged Mr. Bean to apply for the state's insurance program for the poor, but that he didn't follow through.

"It doesn't appear as if we were incredibly aggressive in seeking payment," Ms. Robbins says. "There are many tragic situations we see day in and day out, and so there is a time for people to work through their grief, [and] there is time for them to deal with the finances of their medical care." Ms. Robbins adds that Mr. Bean's bill didn't have a code that indicated a suicide attempt, so "the folks that process this wouldn't have known." After inquiries from the Journal, Ms. Robbins says Carle's collection lawyer had agreed to eliminate Mr. Bean's interest charges, and that Mr. Bean now owes the hospital $6,535.

Carle also defends its pursuit of its October 2001 body attachment against Ms. Atteberry, 26, the single mother whose $1,678 debt had resulted from a miscarriage. Ms. Atteberry, who then was working as a waitress at a local pizzeria and is now unemployed, says she turned herself in to authorities after her shift ended one evening. She says she didn't want to be arrested in front of her two daughters. At the time, one was 3 years old and the other 3 months.

Ms. Atteberry was also the subject of an earlier body attachment order in August 1998, stemming from a debt of $1,514 that she incurred for various medical treatments in the mid-1990s at both Carle and Provena Covenant. Ms. Atteberry, who then was working at Kentucky Fried Chicken, says she turned herself in to authorities the following month, even though she was nine months pregnant. "I was freaking out," she says. "I didn't want to go into labor when they arrested me." She was detained in a jail cell for under an hour while her $250 bail payment was being processed.

Cheryl Harmon, Provena Covenant's chief financial officer, says the treatment of Ms. Atteberry was consistent with general practices in the industry. Ms. Harmon says Provena Covenant filed several hundred collections lawsuits a year in the mid-to-late 1990s, but a change of philosophy and collections agencies has drastically reduced that number -- to as few as 19 in 2002. A court search revealed that Provena Covenant obtained a body attachment against one of its debtors as recently as February 2003. That patient, who was briefly arrested in March, couldn't be located for comment.

Provena Covenant has "made a number of changes to make sure we aren't sending people to collection who cannot pay," Ms. Harmon says. "It really has been a soul-searching to find a way to distinguish between those who can't pay and those who can." Provena Covenant says Ms. Atteberry has paid $764, and the hospital has "purged" the rest of her debt. Earlier this month, in response to inquiries from the Journal, Provena Covenant's chief executive, Mark Wiener, 47, said the hospital would no longer pursue body attachments.

Ms. Robbins, Carle's spokeswoman, says Ms. Atteberry ignored numerous efforts to reach her. "We sent statements and we sent her letters," and also telephoned Ms. Atteberry and left a message with her father, Ms. Robbins says. Noting that Ms. Atteberry could have avoided the court proceedings by communicating with the hospital. She probably would have qualified for discounts or other financial assistance, Ms. Robbins says: "There is only so much we can do for folks."

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Updated October 30, 2003

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