First round of lawsuits filed over HSA debts

Cayman Islands Hospital
Cayman Islands Hospital

Several lawsuits were filed this month in the Cayman Islands government’s first attempt to take residents to court over past-due medical bills.

At least three writs of summons were filed July 10 in the Grand Court by the HSM Chambers law firm, which is acting on behalf of government in these cases. HSM Managing Partner Huw Moses said Friday that a few other claims seeking payment of overdue hospital bills were filed in Summary Court this month as well.

Mr. Moses said this was the “first batch” of lawsuits filed following an agreement between the Health Services Authority and HSM to collect unpaid debts from former patients.

The public hospital system has amassed more than $90 million in bills which have not been paid for at least a year, referred to as “bad debts,” which the agency indicated it was unlikely to collect without the ability to force people to pay.

The government has placed liens on patients’ properties as collateral for repayment, but it was previously limited by a policy that prevented suing people to recover medical bills.

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That policy was ended during the previous term of the Progressives-led government administration and the contract with HSM to help collect the bills was signed last year.

In the three Grand Court writs filed July 10, the amounts owed by each defendant varied from about $23,000 to about $38,000.

For instance, one man sued by the HSA had unpaid bills dating back to September 2012 totaling $31,279.90. The lion’s share of that came in one charge in January 2016 for more than $29,000 that had not been paid.

In the second case, a woman owed just more than $23,000 in medical bills dating from 2014-2015.

In the third case, $37,716.41 was owed for bills dating back to July 2012. The man sued in that case had 36 separate invoices billed which the health authority alleged he had not paid.

In all cases, the patients were given initial request letters and then demand letters a couple of months later. They were not sued until a deadline date of July 9 passed, several months after the initial request for repayment was made.

The debt collection efforts via HSM began earlier this year as a “pilot project” aimed at collecting $1 million in unpaid hospital bills – a small percentage of the total owed to the HSA.

“We will change the culture through this process,” HSA Chief Executive Lizzette Yearwood said in January. “We are trying to help our customers understand that we are serious about collecting for services. However, there are government programs to assist eligible persons who are unable to pay.”

Mr. Moses said his firm would be commencing collection operations through the normal process, contacting debtors first via phone, emails or letters, and negotiating with them about payment. Mr. Moses said taking individuals to court in debt collection cases is always used as a final option and that the preferred alternative is to work out a payment plan.

Cayman Islands Auditor General Sue Winspear reported in late 2017 that $94.5 million in bad debts have been accumulated by the public hospital system.

The collection effort is not the first time the health authority has attempted to collect outstanding bills, but it is the first time a local law firm has been used in that process.

HSA Chief Financial Officer Heather Boothe told the Legislative Assembly’s Public Accounts Committee in October 2017 that the authority tried to collect about $4 million in unpaid bills, achieving roughly a 3 percent success rate via a collection agency.

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  1. I do agree with Roger Davis that this can be a real moneymaker for the HSM law firm, but believe it can also help relieve pressure on the HSA’s dwindling resources and ever-expanding bad debts ledger.

    However, I must ask “Whatever happened to Caymankind?. How are these folks able to walk around their neighborhoods chatting with neighbors when they know that they are in effect asking their friends, family, and neighbor to pay their medical bills? After all, the HSA is supported by tax dollars. Tax dollars being defined as taxes, fees, service charges, fines or customs fees – all of which we pay every day to support government and HSA.

    Perhaps if these folks think their friends, family, and neighbors are glad to pay their hospital bills, they should establish a “GO FUND ME” account and see how that works out!