Health Care Giant Sold Off Dozens Of Hospitals But Continued Suing Patients
As Community Health Systems has downsized, what remain are like zombie hospitals – little more than legal entities still taking patients to court even though the new owners don't sue.
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 East Nashville apartment early this year. She hadn't been vaccinated yet and says she wasn't really 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 says.
It started with a hospital visit in May 2019.
Cantwell was admitted for a short stay at the Tennova Healthcare-Lebanon facility owned at the time by Community Health Systems, a publicly traded company headquartered in Franklin, Tenn. 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.
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.
A WPLN News investigation finds 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 been backing away from taking patients to court over unpaid medical debt. The state of New York even banned the practice.
Community Health Systems is on the tail end of a corporate downsizing that shrank the company from more than 200 hospitals down to 84. That included 11 facilities in Florida after the 2020 sales of Bayfront Health St. Petersburg and St. Cloud Regional Medical Center to Orlando Health.
The sell-off helped stabilize the company after taking on massive debt during a period of rapid growth that briefly gave Community Health Systems more hospitals than any other chain in the country.
That debt included the $7.6 billion purchase in 2014 of Naples-based Health Managed Associates, which added two dozen Florida hospitals, including Bayfront, Pasco Regional Medical Center in Dade City, Brooksville Regional Hospital and Spring Hill Regional Hospital.
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 says. "At least I have a way to take care of this now."
When her final pandemic stimulus money dropped into her bank account, Cantwell says she sent it straight to the company that sued her, even though she says 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, publicly traded 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 says.
Community Health Systems' debt problem
Court records indicate Community Health Systems stepped up filing lawsuits against patients in 2015 at the same time the company's 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 its own COVID-19 relief money.
A spokesperson for HCA Healthcare, the largest for-profit hospital chain in the country, says its hospitals do not sue patients over unpaid medical debt — during the pandemic or otherwise. The Nashville-based corporation also returned all of its COVID relief funding.
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 try to pursue patients that owe it money.
Vanderbilt University Medical Center spokesperson John Howser says 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 writes 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, Tenn., that continues to sue patients, but Howser notes that Community Health Systems still has the controlling interest.
"The thing is, these aren't rich people who don't want to pay their bills," says Christi Walsh, a nurse practitioner who directs clinical research at Johns Hopkins University. Her team focuses on hospitals suing patients and actively 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."
For one family in Wilson County, Tenn., the husband and wife had both been sued by Tennova Healthcare-Lebanon. He works in a distribution center that shut down for months during COVID-19. She cared for their foster kids and delivered meals with DoorDash, telling WPLN News they were too busy to make it to 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 physical health problems.
"It threatens the public trust"
Walsh's team researched the most litigious hospitals in the state of Texas between 2018 and 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 former patients.
Marty Makary is a surgeon at Johns Hopkins who wrote a book about health care billing called The Price We Pay. He says most hospitals have changed tactics because suing their patients doesn't make them tons of money after attorneys' and court fees, and it hurts their brand. But he says 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 says.
Even if Community Health Systems is willing to take a hit to its reputation, Makary says 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 says.
In a statement to WPLN News, a Community Health Systems spokesperson says that the company used its COVID-19 relief money to pay for pandemic expenses and make up for lost revenue. As of January, the company has decided to take patients to court only if they make at least twice the federal poverty level — or about $52,000 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 says in an email.
The policy change is meant to be retroactive. The company will withdraw litigation for anyone who qualifies, Pitt says. 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, she says.