Hospitals Sued 7,517 Patients, Family Members Over Medical Debt

RALEIGH – North Carolina hospitals sued 7,517 patients and their family members to collect medical debt from January 2017 through June 2022, according to a new study jointly authored by Duke Law School faculty and the Office of State Treasurer (OST).

Many of these legal actions resulted in default judgments in state district courts and included awards of 8% interest charges on patients’ medical debt. In total, interest charges and other added fees accounted for 35.4% of the $57.3 million in total judgments owed by patients. Nonprofit hospitals were responsible for 90.6% of the 5,922 lawsuits against patients. State Treasurer Dale R. Folwell, CPA, cites the study as a new reason to call on the state House of Representatives to pass Senate Bill 321, the Medical Debt De-Weaponization Act.

The bill would protect patients and their families by capping interest in medical debt collection, requiring more transparency in medical bills and providing patients with additional consumer protections, the treasurer said. The Senate unanimously passed the bill despite opposition from hospital lobbyists.

“This is tantamount to elder abuse,” said Treasurer Folwell. “Hospitals are supposed to care for patients — not overcharge them, sue them and take their homes. These hospitals are destroying the upward mobility of whole families, hurting cancer patients’ recovery, and creating intergenerational poverty. They must be stopped.”

The Treasurer was joined by Duke University Law School professors Barak Richman, J.D., Ph.D., and Sara Sternberg Greene, J.D., Ph.D., during a press conference Wednesday, Aug. 16, to release the study, along with a collection of patient interviews independently conducted by OST.

The study found that five hospital systems — Atrium Health, Caromont Health, Sampson Regional Medical Center, Community Health Systems and Mission Health — were responsible for filing 96.5% of the 5,922 lawsuits against patients, and that the state was home to eight “litigious hospitals,” defined by the authors as systems that brought more than 40 lawsuits during the 4.5-year sample.

Patient interviews revealed that having health insurance was not enough to protect them from lawsuits, and some patients did not even know they had been sued. One 80-year-old couple did not know about a $90,000 lien against their house until contacted by OST researchers. Another 70-year-old couple cannot retire because Atrium Health has a $192,000 lien against their house, despite earlier assurances of help with the bills.

“We see a system that fails to deliver due process from start to finish,” Richman said. “Patients are charged inflated prices that they neither see nor assent to pay, they get sued in a process that delivers default judgments, and they suffer immediate penalties such as interest payments and liens against homes. Some of these patients never knew they were being sued in the first place.”

In North Carolina, medical debt judgments can last up to 20 years, and judgments can automatically act as liens against patients’ homes. The study revealed that hospitals won default judgments across a majority of the cases filed in district court. Patients reported that even when they did try to fight the lawsuits, they lacked the information needed to understand the hospital bills.

“By suing some of their most vulnerable patients, hospitals exacerbate long-standing racial wealth inequalities,” said Sara Sternberg Greene. “Black families have only one-tenth of the wealth of white families, making it difficult to pay for unexpected medical bills. These lawsuits are extracting patients’ intergenerational wealth through liens on their homes and steep interest charges.”

“Many of these hospitals are overcharging patients. These patients couldn’t see the price, but they get sued anyway,” said Treasurer Folwell. “This is a continuation of the transfer of wealth from sick people to multibillion-dollar nonprofits and their multimillion-dollar executives.”


North Carolina hospitals sued 7,517 residents over medical debt and won a total of $57.3 million in judgments from January 2017 through June 2022.

  • The average judgment was $16,623.23, but almost one in four judgments was worth more than $20,000. Some patients owed as much as $192,000.

Interest charges, attorney fees and court fees accounted for 35.4% of the total value of all judgments against patients.

  • Hospitals used the court system to charge 8% annual interest on medical debt judgments, burdening some patients with more than a decade of accumulated interest.
  • Interest fees exceeded $10,000 across more than one in ten judgments (463 out of 3449), and the majority of hospital judgments charged patients at least $1,000 in interest (2,162 of 3,449). The av­erage interest amount was $5,179.98.

Five hospital systems were responsible for 96.5% of all lawsuits.

  • Atrium Health filed a full 41.9% of the cases against patients. Atrium Health is now the fifth largest hospital system in the nation after its recent merger with Advocate Aurora Health. Atrium Health filed 2,482 lawsuits against North Carolinians and won an average judgment of $22,953.99.
  • Litigious hospitals marked up their chargemaster “sticker prices” by an average 480.5% from their costs. At least 40% of litigious hospitals had charge-to-cost ratios higher than 500% each year from 2017 to 2021.
  • More than half of litigious hospitals exhibited dou­ble-digit net profit margins for every year except 2018, and they record­ed an average net profit margin of 15.9% in 2019 — far higher than the national average of 6.52%.

Nonprofit hospitals were responsible for 90.6% of the lawsuits against patients, calling their charitable mission into question.

  • Nonprofit hospitals receive lucrative tax exemptions to care for disadvantaged patients, but the majority of litigious hospitals spent less on charity care than the estimated value of their tax exemptions.
  • The value of a nonprofit hospital’s tax exemption is estimated to be 5.9% of expenses. More than 60% of litigious hospi­tals spent less than that on charity care each year during our sample, and in 2021, 84% of the litigious hospitals spent less.

Patients are uniquely vulnerable to medical debt lawsuits. Unlike in almost all other sectors of the economy, patients lacked critical pricing information that would have helped them protect their financial health. Furthermore, hospitals sued patients over surprise bills and benefited when patients did not appear to defend themselves in court.

  • Hospitals won default judgments across 59.8% of the judgments in district court. Default judgments are typically awarded when one party does not respond to a court summons or appear in court.
  • Some of these patients were unaware of the legal proceedings against them. For example, an 80-year-old couple learned of a lien of approximately $90,000 against their house only after being contacted by OST researchers.
  • Black defendants received 26% of default judgments, and Black and Hispanic defendants were both disproportionately represented among the patients who incurred larger amounts of interest.


    • You may find this hard to believe but some people CAN’T pay their bills. They may want to but they can’t afford to. Medical care in the US is ridiculously expensive and most are going to choose to eat or live in a dwelling over losing everything so the hospitals get paid. I mean they could not get medical treatment so they don’t end up with bills but you know, that might lead to death. Do you have any compassion and empathy for the less fortunate?

      • @JD: If *I* can pay my bills, so can you. The problem is that the Snowflake Dem Socialist don’t want to pay for anything. If you want FREE medical care and FREE education go to Europe.

        • Ok, so you think everyone makes the same amont of money as you and have made all the same life decisions. Good to know there’s some delusion involved. You have no idea what all people are going through. I think you assume everyone has a well-paying job with good insurance. That is not the case, but it would be if we had universal Healthcare. Only conservatives think it’s free – others know it comes from tax money. I know your fear is that you’d be paying for other people’s medical care, but unemployment is at a historical low so the majority would be contributing. And in general, medical expenses would drop because there wouldn’t be people not paying. I wish you would explore the world and really see what’s happening but I know it’s scary to leave JOCO.

          • JD – it astounds me the people that don’t understand how much better some countries in other parts of the world have so much better healthcare, so much better educational opportunities. Yes United States is a great country or a good country but that doesn’t mean we’re the best. We’re a lot better than some other countries, but they are the countries that we helped ruined in South America. That’s why all of their people are coming here for amnesty, because of what our government did to their government.. But no, people don’t want to look that deep. they fear the other. Even if the other works hard, contribute greatly to our economy. They fear others who love differently than they do but harms no one. Dresses differently than they do,but harms no one. worships another God, or no god than they do. None of which affects their darn lives. Since 2015 or 16 they’ve been taught to be scared of everything. they can’t even drink a Bud Light without freaking having a meltdown. I don’t drink beer it’s disgusting, but if I did, I wouldn’t let a political party tell me which beer I could or couldn’t drink.I don’t let any political party tell me how to think – and there isn’t a politician or celebrity etc., that I adore or idolize and follow blindly. I ask way too many questions, I always have so I’ve been told! I’ve worked for the federal government, as did my mother, my sister and several other family members. Capitalism isn’t the best of the best. The best countries combine different methods to make it work. We are the only country in the world where someone can lose their home for unpaid medical bills yet we’re supposed to be the best country. Let that sink in….. does that make any sense to a normal sane person?

          • @JD: I think that people need to learn to live within their means. Perhaps you’d prefer to live unde Communism: from each according to his ability, to each according to his needs. Eh?

  1. Jesus said love your neighbor. Duet says “there shall be no poor among you”. Republicans say every man for himself good luck try to be born rich.

  2. I recently had an appendectomy and I was only in the hospital bed overnight waiting on the surgery the next morning. I was completely ambulatory. Nevertheless, they sent me a spirometer so I wouldn’t get pneumonia while laying down for a few hours. When the bill came, that spirometer was billed at $317.00. I can buy the EXACT same spirometer made by the same company for just over $2.00. That’s just one example of the insane bill. Maybe if hospitals were forced to charge the actual cost plus a set, reasonable profit margin, people could afford to pay their bills.

        • I was sharing someone elses story. And most diabetes isn’t God’s will, it’s poor lifestyle choices. #takeresponsibility

          • My grandson has type 1 diabetes … I understand you typed “most” – but still. There are many, many type 1 diabetics. Diet and lifestyle habits don’t cause type1 diabetes. I think this is very important for many, if not all people to understand. Also, the mayo clinic says type 1 diabetes, usually develops in childhood or adolescence it can appear in adults as well. I don’t think you meant any harm. I just wanted to add a a little more education into this conversation. I hope you don’t mind, definitely not trying to be snarky. Just trying to educate the people of Johnston County, which can be very hard to do sometimes….

  3. I think we are the only non third wold country that does not have some type of universal health care system. I have friends that live in Canada, Ireland, the UK and Germany. It is unheard of in ANY of those places for anyone to not have medical care. When they heard you can actually lose your home in America because of unpaid medical bills they were all baffled – after all the US brags they are the best country. We are not in many ways. This could be fixed if we got rid of lobbyists, special interest groups and Americans actually paying attention to how other counties handle their health care and educational systems. It is way better than what we have ever had and even my Republican doctor agrees we need go to Universal healthcare method. I am not talking about medicaid for all – this is not what other countries have.

    • I agree let’s do like other countries as far as childhood vaccines. The USA has the most “mandatory” childhood vaccines but also the highest autism rate, highest infant mortality rate, highest amount of auto immune diseases and some of the worst health. All of those things use to be a much smaller rate before all the vaccines got added without long term testing to the childhood vaccine schedule.

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