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CNN: 340B Healthcare System Aggressively Sues Patients with Medical Debt

A recent CNN investigation revealed that the University of Arkansas for Medical Sciences (UAMS) and affiliates Arkansas Children’s Hospital and Central Arkansas Veterans Healthcare System have been aggressively suing former patients, including their own employees, over medical debt. According to the report, since 2019, UAMS has filed over 8,000 lawsuits to collect unpaid medical bills, with an alarming increase in legal actions during the pandemic.


UAMS also participates in the 340B program. This means UAMS benefits from steeply discounted drugs from manufacturers and, in return, should be providing affordable medicines and health care services for low-income and other vulnerable patients.


Instead, the health system’s aggressive legal actions over unpaid medical bills – many of which were $1,000 or less – have had severe consequences for defendants, leading to bankruptcy and financial hardship.


UAMS practices are not the only example of a well-resourced health system resorting to aggressive debt collection practices, even during a healthcare crisis. In June, The New York Times exposed another 340B hospital, Allina Health System, for its troubling policy of cutting off care for patients with medical debt. For 340B participants, this approach to collections, which includes adding significant fees and interest charges, raises concerns about their commitment to the underserved individuals who often depend on their care.


ASAP 340B believes eligibility standards for 340B program participants must be reformed. 340B hospitals should increase access to affordable health services, and their participation in the 340B program should be conditioned on them not engaging in aggressive debt collection practices that penalize the most at-risk communities. ASAP 340B’s Policy Principles call for additional accountability requirements to ensure eligible hospitals are supporting underserved communities as true safety-net providers.


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