A Las Vegas-based collection agency has filed more than a thousand medical debt collection lawsuits against St. Louis area residents since the end of 2014.
The lawsuits by CP Medical LLC claim former SSM Health patients still owe money for past treatment. SSM Health is a Creve Coeur, Mo.-based Catholic and nonprofit health system with a stated charitable mission of providing care to anyone regardless of their ability to pay.
CP Medical has filed approximately 1,078 lawsuits in St. Louis, St. Louis County and St. Charles County between Dec. 2, 2014, and March 10, according to a St. Louis Post-Disptach analysis. Defendants had an attorney in only 17 of those cases. For defendants who do not show up, the cases likely end with a default judgment.
After reviewing the lawsuits, the newspaper found that 99% of the cases involved debt that originated from ER treatment at an SSM hospital. CP Medical is one of several affiliates of Duluth, Ga.-based Capio Partners LLC, a national medical debt collection operation.
Capio was founded in 2008 by Jim Richards. Capio and its affiliated companies in the past five years have purchased more than 19 million accounts across the U.S. with a face value of more than $17 billion, according to its website.
SSM Health officials said they did not know about the lawsuits until the newspaper asked about them. The litigation apparently is not being done on behalf of SSM Health or Schumacher Clinical Partners (SCP), a for-profit firm that runs many of SSM Health’s emergency rooms. However, Lafayette, La.-based SCP has sold debt to Capio and litigation work is common after a debt sale. SCP did not disclose how much debt it has sold to Capio.
SSM Health decided in 2008 to contract out most of its emergency rooms to SCP. The decision was made because of rising costs and complexities needed to staff emergency rooms. While the practice is common in the healthcare industry, many legal experts argue that outsourced medical services can blur the line between nonprofits and for-profit operations and expose many low-income and uninsured patients - who otherwise might be candidates for discounted care or charity care - to potentially aggressive collection practices. Many of these patients turn to emergency rooms for their medical care. National Consumer Law Center officials said it’s “appalling” that a nonprofit Catholic hospital is letting this happen in their community The Internal Revenue Service requires nonprofit, in exchange for tax-exempt status, to provide financial assistance to the poor and uninsured. The IRS does not specify how much charity care or financial assistance tax-exempt hospitals should provide. SCP sold its unpaid ER bills to Capio Funding LLC in 2014.