Hospital Bill Bankruptcy

When Bankruptcy May Be the Only Possible Action

Can hospitals take and foreclose on property because of unpaid hospital bills?

My mother’s husband passed away, he had no medical insurance and left her deeply in debt (which she did not know about).

She had to file bankruptcy on their business. Medicaid has denied the claim because of a $100,000 life insurance policy. The hospital bill is more than $250,000.

Thanks for any info.

Lisa

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Yes, an unpaid hospital bill is just like any other debt. The hospital can start collection actions and sue if necessary to try to collect.

Unpaid medical bills are reportedly one of the most common reasons for bankruptcy filing. Consult with a qualified bankruptcy attorney to see if the hospital (or anyone else)has a claim against your mother – if your mother did not know about or co-sign his debts, the estate of her deceased husband may be the only one on the hook for them.

Since I doubt the hospital is the lien holder on the property, by which I assume you mean real estate, I would think legal action of some sort would be required. Check with a local attorney regarding this. In some states, I believe foreclosure does not require judicial intervention.

If your mother did not assume or co-sign the hospital bill, the hospital may have no recourse against her and can only pursue her husband's estate for unpaid bills. This is unlikely, since hospitals always want someone to accept responsibility for the bill, but it is something to look into.

I assume you mean the Medicare denied the claim because your mother was the beneficiary of a $100,000 life insurance policy on her husband.

I am no expert in Medicare law, but the way I understand it, it is only supposed to consider the assets of the patient at the time he needed medical care. And, as far as I can tell, it is supposed to pay for critical care regardless of assets.

My understanding is assets only come into play if the patient needs long term nursing care at which point assets have to be depleted and the patient is then transfered to Medicaid.

A life insurance policy becomes payable after medical care is no longer needed. I don't know if Medicare's position is correct or not. This is another matter you should have an expert look into.

If Medicare's refusal to pay is correct, one option is to try to renegotiate the debt. It seems as if your mother has some assets, so personal bankruptcy may not be the best way to go. She can try to deal with the hospital herself or hire a lawyer or credit counselor to do it for her.

If she is, she will probably have to file for personal bankruptcy.

In any event, it looks like she should hire a qualified lawyer to ensure her rights are protected. He should also look into whether Medicare's position is correct in your mother's case.

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