Hospital Billing and Financial Practices: “First Do No Harm”

  ·  Health Policy Hub   ·   Mark Rukavina

photo credit: Getty Images

Hospitals Should Make Certain Their Policies Do Not Burden Community Residents or Employees  

The doctrine, First Do No Harm, is a fundamental health care principle. It guides providers as they consider the possible harm that might result from their actions or interventions. At this time when millions of people across the country are struggling with financial challenges, it is imperative that hospitals examine their practices for providing financial assistance, collecting outstanding medical bills and compensating employees with this principle in mind. Given the racial and ethnic disparities laid bare by the COVID-19 pandemic, examination of all these practices should be done through a racial equity lens. 

As Dr. Antony Fauci, the nation’s top infectious disease expert recently saidthe COVID-19 pandemic exposed “the undeniable effects of racism” that have led to unacceptable disparities that hurt Blackbrown and Indigenous people. The effects of racism play out in health care and far beyond. People of color are more likely to be uninsured compared to white people. As Black people comprise a great percentage of the population in states that have not expanded Medicaid, they are more likely than whites to fall within the coverage gap, having incomes above the Medicaid eligibility threshold but below the poverty rate and therefore ineligible for coverage under the Marketplace. Racial and ethnic minority groups are disproportionately represented in essential work settings like health care facilities, grocery stores, public transportationproduction, and food processing, putting them at heightened risk of being exposed tCOVID-19. Yet the vast majority of these jobs do not offer sufficient paid sick time or health benefits. In addition, certain racial and ethnic groups have lower incomes, less wealth and greater levels of debt.   

Hospitals, as valued community institutions, should be on the leading edge of interrogating their policies to ensure they are not a burden on the communities they serve. Communities would be well served if hospitals would follow the lead of the federal government, as directed by President Biden through his Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Governmentassessing whether, and to what extent, programs and policies perpetuate systemic barriers to opportunities and benefits for people of color and other underserved groups. [1] As with federal agencies, hospitals must work with groups that have been historically subject to discrimination in policies and programs and engage with community-based organizations and civil rights organizations to advance racial justice. 

We urge all hospitals in the U.S. to begin by conducting a thorough examination of their financial assistance, billing and collection policies to make certain they provide equal opportunity for all people. Though the economy may be improving, millions of Americans are still out of work and are not feeling financially secure. Health care costs are an ongoing concern. A recent poll found that two-thirds of people worried they will not be able to afford health care this year. Another survey found that one in five people – more than 46 million adults – did not seek treatment for a health problem during the pandemic. Though Americans of all races skipped treatments in nearly equal numbers last year, about one-third of Black adults – almost double the number for white adults – and more than one-fifth of Hispanic adults, said they could not afford health care if they needed it today. This problem is made even worse as reports of hospitals suing their patients and garnishing wages strikes fear into the hearts of those who need medical care. 

We call on hospitals to act immediately. They must take steps to establish policies that Do No Harm and strengthen the communities they serve.  

Community — The following actions will have a positive effect on a hospital’s patients and its community. 

  • Screen patients for insurance and assist uninsured patients with applications for Medicaid or Marketplace coverage (The special enrollment period for Marketplace coverage has been extended through August 15.) 

  • Conduct analysis of applications for financial assistance, both approved and denied, as well as any legal collection actions, and disaggregate the data by race, ethnicity, language, and gender. [2]

  • Review the hospital’s financial assistance policy, revising it to be as generous as possible, and simplify the application process.   

  • Review the hospital’s billing and collection policy and revise it based on an evaluation of whether board-authorized collection actions (i.e., legal actions, freezing bank accounts, garnishing wages, liens on property, credit reporting) inflict unwarranted damage on families and further disadvantage people of color and other underserved populations.  

  • Cease collection actions for any family that will be put at risk due to a legal collection action. 

  • Establish a debt amnesty program for any patient that should have qualified for financial assistance, but did not receive it. 

  • Create payment plans for patients with outstanding balances, taking into account household income and other expenses, and set reasonable payment levels mutually agreed to by patient and hospital. 

  • Partner with community-based organizations representing or working with people of color or other underserved communities, seeking their input on hospital policies. 

  • Work with these same organizations to publicize the hospital’s willingness to work with patients on insurance and financial assistance policy applications. 

Employees — These actions serve to strengthen hospital employees’ families, as well as the community served by the hospital. 

  • Commit to paying staff, contractors and community-based partners a living wage, with the minimum hourly rate of $15. 

  • Guarantee adequate health insurance, retirement and paid leave benefits for all employees. 

  • Recognize that employees are often also patients and subject to harmful billing and collections processes, work to reduce or forgive employees’ medical debt.  

  • Work to ensure that your workforce at every level reflects the racial diversity of the community served. Establish hiring practices to promote this goal, such as by reviewing job descriptions carefully to see if they may be inadvertently excluding certain types of candidates and implementing a blinded resume review process.  

  • Establish a policy to promote the hiring of fully qualified individuals with arrest and conviction records into appropriate positions.  

  • Ensure diverse leadership through a review of the composition of your board and c-suite and commit to filling a significant portion of these positions with Black peopleother people of color, and other underserved populations 

  • Promote early exposure to health and science careers for Black youthother people of color, and other historically excluded populations to build trust and create a pipeline for a diverse health care workforce. 

Hospitals are an important economic force in their communities and their policies have tremendous influence over the community’s health. For non-profit hospitals, they are expected to provide community benefit in exchange for what they would otherwise pay in taxes, in order to make services more accessible for low-income and underserved populations. As a step forward on the path toward health equity, we urge all hospitals – not only non-profit hospitals – to assess the policies outlined above and implement improvements that dneconomic harm to their patients, the communities they serve, or their employees. 


[1] Per Biden Executive order, underserved communities that have been denied such treatment, such as Black, Latino, and Indigenous and Native American persons, Asian Americans and Pacific Islanders and other persons of color; members of religious minorities; lesbian, gay, bisexual, transgender, and queer (LGBTQ+) persons; persons with disabilities; persons who live in rural areas; and persons otherwise adversely affected by persistent poverty or inequality

[2] As recommended by the Healthcare Financial Management Association in its best practice document