REPORT: Hospitals Hiding Prices, Using Third Parties to Sue Patients

A new report has exposed in shocking detail how hospitals are suing patients over medical debt through “stealth intermediaries” – while also massively overcharging for services ranging from routine blood tests to major surgeries.

The study from PatientRightsAdvocate.org in partnership with George Washington University and Stanford University School of Medicine specifically examined the practices of UCHealth, a large nonprofit hospital system with 14 hospitals in Colorado, Wyoming, and Nebraska.

According to the report’s findings, UCHealth brought more than 15,700 medical debt lawsuits using aggressive “debt-seeking middlemen” to hide its responsibility in targeting patients. In some cases, patients’ wages were garnished for hospital bills they had never even seen in full. In others, bank accounts were seized.

As KFF Health News has reported, roughly 100 million Americans are currently in debt due to medical costs, the nation’s leading cause of personal bankruptcy.

Many patients were unaware that the entities suing them were connected to the hospital that had provided their care, believing they were dealing with debt collection firms, not the original medical providers. UCHealth’s third-party arrangement, while technically legal, shielded the group from public scrutiny and allowed the hospital to distance itself from the uncompromising tactics used to collect payment.

But what may not be legal is UCHealth’s failure to provide patients with an itemized bill explaining the charges before legal action was taken. In January 2021, a landmark Trump administration rule took effect requiring hospitals to publish their prices online in a clear, consumer-friendly format. The goal was simple: empower patients with the information they need to make informed health care choices.

But under the Biden administration, enforcement of the rule stalled. As a result, compliance has been inconsistent. The analysis by Patient Rights Advocate revealed that only 36 percent of U.S. hospitals are fully adhering to the transparency requirements. UCHealth, notably, was not among them.

One case in the study and reported by NBC News last month involves Blake, a 63 year-old Colorado resident sued by UCHealth for more than $100,000 following emergency surgery. He sought clarity on the bill but got nowhere. After reaching out to Patient Rights Advocate, they discovered that the charges were far higher than the amounts the hospital listed under federal price transparency rules. Only a quarter of the charges showed up at all on the hospital’s required price list.

“For years, UCHealth has hidden their prices then unaccountably sued Colorado patients through intermediaries over unpaid bills,” said Cynthia Fisher, founder and chairman of PatientRightsAdvocate.org, in a statement provided to AMAC Newsline. “Without price transparency and itemized bills, these patients have no way to verify hospital charges are legitimate and not the result of overbilling or fraud.”

This practice is not merely a UCHealth problem. Other hospital systems and health care providers have been accused of using similar tactics. In the absence of robust federal enforcement of price transparency rules over the years, it appears a majority of U.S. medical care institutions could be intentionally hiding pricing information from patients.

Thanks to advocacy groups like Patient Rights Advocate and recent developments at the state and federal level, however, hospitals are being forced into compliance with transparency rules. Shortly after President Donald Trump took office earlier this year, he issued a new executive order directing federal agencies to enforce full price transparency, requiring hospitals and insurers to disclose actual prices, not vague estimates.

Earlier this month, Florida Attorney General James Uthmeier also announced a formal inquiry into several hospital systems. The probe, conducted via subpoenas issued to entities such as Southern Baptist Health of Florida and AdventHealth, focuses on potential violations of both state and federal pricing-disclosure statutes.

Uthmeier emphasized that “patients are still consumers, and they deserve transparency,” accusing hospitals of predatory billing practices and failure to publicly post standard service prices. The investigation follows findings from Patient Rights Advocate revealing that only about 29 percent of Florida’s hospitals met federal transparency requirements, with even fewer providing substantive, actionable pricing data.

High-profile billing controversies in the Sunshine State, such as a 2021 case involving an AdventHealth patient billed over $500,000 for the birth of her child, later reduced to around $300, have underscored the lack of accountability in the system. Uthmeier framed his enforcement effort as a state-level execution of Trump’s executive order.

Rising health care costs continue to burden American seniors, with a growing number of advocacy groups like Patient Rights Advocate and AMAC Action urging stronger enforcement of hospital price transparency laws. Momentum is also building for regulation of hospitals utilizing third-party entities to file lawsuits against patients without providing clear billing documentation or an opportunity to verify charges.

For older Americans, the consequences of unclear pricing and aggressive billing tactics are especially severe. Fisher told AMAC Newsline that these serious consumer protection issues cannot be ignored. “No court should issue potentially financially devastating judgments over a bill that’s erroneous or whose underlying prices can’t be proven appropriate,” she said.

Advocacy groups like Patient Rights Advocate have played a critical role in bringing these issues to light and prompting action at both the state and federal levels. From executive orders to attorney general investigations, recent developments suggest that sustained public pressure can drive meaningful reform. But whether these efforts lead to lasting change will depend on continued enforcement and a renewed commitment to transparency from healthcare institutions nationwide.

W.J. Lee has served in the White House, NASA, on multiple political campaigns, and in nearly all levels of government. In his free time, he enjoys the “three R’s” – reading, running, and writing.