Struggling rural hospitals fight patients who can't afford care

POPLAR BLUFF, Mo.

The people being sued arrived at the courthouse carrying their hospital bills. A 68-year-old wheeled her oxygen tank. A nurse's aide came wearing scrubs after a night shift. A teenager leaned against crutches.

By 9 a.m., more than two dozen people were crowded into the room for what has become the busiest legal docket in rural Butler County.

"Lots of medical cases again today," the judge said, opening the session for another weekly fight between a hospital and its patients.

This year, Poplar Bluff Regional Medical Center has filed more than 1,100 lawsuits for unpaid bills as emergency medical care has become a standoff between hospitals and patients; both going broke. Unpaid medical bills are the leading cause of personal debt and bankruptcy in the U.S., according to credit reports.

Patients who visit rural emergency rooms in record numbers are defaulting on their bills at higher rates. Many of the nation's 2,000 rural hospitals have begun to buckle under bad debt, with more than 100 closing in the past decade and hundreds more on the brink of insolvency.

The result each week in this town of 17,000 has become so routine that some people derisively refer to it as the "follow-up appointment" — 19 lawsuits for unpaid hospital bills scheduled on this day, 34 more the following week, 22 the week after that. Case after case, a hospital that helps sustain its rural community is now also collecting payments that are bankrupting hundreds of its residents.

"We're seeking fair payment for services we've provided. Nothing else," he said.

Behind him were some hospital patients — a population that was on average sicker, older, poorer and underinsured compared with the rest of the U.S. More than 35% of people in the county have unpaid medical debt on their credit report, about double the national rate.

One by one, the patients pleaded their cases. Then it was Gail Dudley's turn. Dudley, 31, who has Type 1 diabetes, had tried to save money by skimping on insulin. Instead of paying $50 every few months for preventive medication, she collapsed, was rushed to the emergency room and eventually sent home with a bill for $8,342, of which she was still responsible for about $3,000.

The judge asked her whether she wanted to talk to the hospital's attorney. "We might as well try," she said.

Matthew McCormick, 27, began the same negotiation he'd been having with patients each week. His cases hardly ever go to trial. More than 90% of the people weren't represented by a lawyer, and at least half didn't show up in court, resulting in default judgments in the hospital's favor.

Her paycheck as a full-time Goodwill clerk totaled $736 every two weeks. After rent, utilities, groceries and child care, she sometimes ran out of money by month's end.

"How about $15 out of every paycheck?" she offered, even though she doubted she could afford it. "Thirty? How's that?"

"Let's say thirty," he said.

If everything went right, she'd be paying for 5½ years.

"Maybe you can borrow it?" said her mother, Norma Garcia.

Dudley's aunt was forfeiting 15% of her paycheck to the hospital. Her cousin was sued for $1,200. Her sister owed $280. Garcia owed $365.

But Daniel Moore, a self-described "old hillbilly lawyer," believed patients had another choice. "Don't pay one cent. Fight them over it."

Moore had been unable to afford a doctor while growing up on a farm, so when clients began arriving with bills they could neither pay nor understand, he agreed to take a look. What he found didn't make sense to him either: $75 for a surgical mask; $11.10 for each cleaning wipe; $23.62 for two ibuprofen pills; $592 for a strep throat culture; $838 for a pregnancy test. He decided to represent several patients free, and went to court against the hospital for a jury trial.

His client was a police officer with insurance, an Army veteran with chronic stomach problems. He'd been tested in the ER, treated with three medications and discharged after three hours with a $6,373 bill. The hospital was suing for copays of $1,650, plus interest.

A billing manager took the stand and said the hospital's prices were in line with other hospitals. She said rural hospitals pay higher salaries in order to recruit doctors, nurses and specialists while also suffering more from federal cuts.

"Yes," the manager said.

"So you, the hospital, think that act alone, not counting the drugs inside the IV … that act alone is worth $365.38?"

"Yes," she said.

In his closing argument, Moore told the jury: "If you're content to let the hospital just crush people, then go on and give them their measly $1,650. But what you can do today is say, 'Hey, we're tired of this.' "

"In reality, this is a simple bill," the hospital's lawyer said. "The hospital provided treatment. He still owes."

As hospital lawsuits continued, Moore agreed to take more free cases. "The hospital circuit," he called it — Mondays in Caruthersville, Tuesdays in West Plains and Wednesdays in Poplar Bluff.

On Thursdays, it was Doniphan, a town of fewer than 2,000 people, where Poplar Bluff Regional had filed more than 300 lawsuits.

At the courthouse, patients crowded into the lobby, waving their hospital bills as fans against the heat before they entered the courtroom. A husband and wife who went for cancer treatments each week but couldn't afford the copays. A college student who owed more than $7,000 for a heart condition. And then the judge, who had presided over hundreds of hospital cases and also recused himself from one a few years ago, when the patient being sued was his wife.

He looked down at a docket with 14 more cases between a hospital ownership company that couldn't afford to keep losing money and patients who couldn't afford to pay. Both sides were drowning in debt, fighting to stay above water, and pulling each other back down. "It's another full docket," he said. "We might as well get started."