Below is are excerpts from an article published in Law 360To view the full article, click here.

From Hospital to Jail – Debtors Face Growing Arrest Threat
By Jack Karp

  • “The knock came just four days after Steven Krueger got out of the hospital. He was recovering from back surgery in his home in Idaho Falls when sheriff’s deputies arrived with a warrant to bring him to the courthouse. Steve was in a back brace and wasn’t supposed to travel, except to the doctor.”
  • “‘I just kind of stood there stunned,’ says Mari Krueger, Steve’s wife. ‘I was just horrified … I was almost hysterical.'”
  • “Mari wasn’t stunned by Steve’s arrest simply because of his condition. She was also shocked because he wasn’t accused of committing a crime. What he was accused of was failing to pay his medical bills.”
  • That increase in medical bills has led to aggressive attempts to collect on them, with hospitals around the country launching thousands of lawsuits against indebted patients. A 2019 study published in the Journal of the American Medical Association documented 20,000 lawsuits filed against patients by Virginia hospitals in 2017 alone, for example.”
  • “‘We’re really in what I would call the perfect storm of policy failures here,’ says Michael Satz, a University of Idaho College of Law professor who specializes in consumer finance law after having worked in debt collection. He pointed to a collection system riddled with ‘old statutes’ not designed to deal with medical debt.”
  • “The end result of that perfect storm? Debtors can find themselves in jail — a harsh reality that’s on the rise, according to Satz and others based on their experiences.”
  • “A handful of states like Washington and Illinois are starting to update their laws to curb the practice and better protect medical debtors, but those efforts are far from widespread, leaving people like the Kruegers waiting for a knock on the door.”
  • “‘It just really was humiliating, because we had never been hauled into something like that, you know, we never experienced anything like that,’ Mari says.”

  • “Hospitals, doctors and debt collectors are increasingly using laws…to effect the arrest and sometimes jailing of those who owe them money, or to threaten them with jail to pressure them into paying their bills, those who work with debtors say.”
  • “‘In recent years, I have noticed an increase in the number of people being aggressively pursued for medical debts as well as an increase in the number of those who have been arrested for failing to appear,’ says Doug Depew, a Kansas bankruptcy attorney. And it’s not just Kansas.”
  • “‘It definitely seems to be happening more,’ says Andy Spears, executive director of Tennessee Citizen Action, an advocacy organization that, among other things, works to improve access to health care in the state.”
  • “At its most basic level, the practice ‘terrorizes’ debtors, according to Satz.”
  • “If you’ve got a choice of paying for some other bill or getting arrested, you’re gonna pay to not go to jail,’ he says.”
  • “That’s what some health care providers — and the debt collectors they hire — are banking on. These hospitals, doctors and ambulance companies often sue patients who owe them money, and if the patient doesn’t show up in court, which Satz says is often the case, a judgment is entered in favor of the creditor, who then tries to enforce the judgment by garnishing a patient’s wages or bank account.”