Hospitals Suing Patients: The Rise of Stealth Intermediaries
Barak Richman, Julie Havlak, Margaret Nikolov, Sujin Song, Ilaria Santangelo, Onisuru Ojegba, Kyle Donohue, Tanner Whitsell, Calvin Haensel, Arnold Milstein, and Cynthia A. Fisher • August 05, 2025
Starting in 2020, the University of Colorado Health system (UCHealth), the state's largest nonprofit hospital system, began relying heavily on third-party debt collectors to engineer lawsuits against its own patients. Though UCHealth had consistently brought lawsuits against patients through 2019, UCHealth sharply decreased its own debt collection actions against its patients the following year. At the same time, total debt collection actions brought by CollectionCenter Inc (CCI), a collection agency owned by a revenue cycle management company, more than doubled. A sample of court records indicates that the majority of CCI's actions were brought on behalf of UCHealth.
UCHealth and CCI initiated a total of 12,722 debt collection lawsuits from 2019-2023. These actions generated 8,987 judgments, 98.8% (8,883) of which were default judgments, that totaled $33.5 million and averaged $3,675 per judgment. More than a third (37.2%) of these lawsuits sought garnishments against 4,730 defendants, primarily targeting defendants’ bank accounts. Two attorneys represented 96.8% of these cases, which assessed defendants an additional $2.8 million in attorneys fees and $1.3 million in court costs.
A second collection intermediary, Credit Service Company (CSC), which media reports indicated was also retained by UCHealth to initiate collection lawsuits against patients, filed 12,121 debt collection lawsuits and was awarded $34.3 million in principal amounts over that same time period. Similar to the other two plaintiffs, CSC won a majority of its actions through default judgments, requested garnishments in 4,683 cases, and assessed defendants $2.2 million in attorneys fees and $1.1 million in court costs. CSC, however, took advantage of state courts’ policy of sealing court documents surrounding medical debt collection, often showing less documentation than actions filed by CCI. Our public records search thus cannot confirm on whose behalf CSC initiated debt collection actions, which reflects the broader lack of transparency in medical billing and debt collection.
A supplemental gathering of courthouse records and patient interviews discloses that many of these medical debt collection lawsuits were products of an opaque and error-prone medical billing system. Almost 450 patients filed answers that contested the legitimacy of the claims, and many indicated that the lawsuits were derived from medical bills that contained errors, were incomprehensible, and reflected hidden and inflated prices. Hospital price transparency files show that prices for common procedures varied by as much as 247 times across UCHealth hospitals. Moreover, the lawsuits themselves inflicted mental and financial distress on UCHealth patients, exacerbating struggles to make rent, afford prescriptions, pay other bills, and missing work for court hearings. One patient sued by UCHealth through one of its intermediaries called the experience a “nightmare” and said the collection efforts put his family through “hell.”
Read the paper:
Download PDF