I am so jaded, having seen, read about, and heard about thousands of outrageous examples of chaos and injustice in our courts, that I am hard to surprise. But this article surprised me a bit! The scope of the practices described is horrifying – it’s nationwide. In essence, the courts are being hijacked to squeeze money from the poor. My friend Steve Hampton, Esq. called this article to my attention because he too sees how unfair this “shakedown” is. I have eliminated more than half the article due to its length; but you get the idea from what remains.
The U S Supreme Court has ruled that people cannot be jailed simply for not paying a debt, unless there has at least been an ascertainment that they have the ability to pay. Yet, in this article we see how the dysfunctional health care in America contributes to this “jailing” problem. In some states, people are locked up for failure to pay state imposed fees and costs. In others, like this Kansas case, they are imprisoned for a combination of state fees and private bills being unpaid.
IN BOTH CIRCUMSTANCES, IT IS WRONG!
Excerpts from the Article:
On the last Tuesday of July, Tres Biggs stepped into the courthouse in Coffeyville, Kansas, for medical debt collection day, a monthly ritual in this quiet city of 9,000, just over the Oklahoma border. He was one of 90 people who had been summoned, sued by the local hospital, or doctors, or an ambulance service over unpaid bills. Some wore eye patches and bandages; others limped to their seats by the wood-paneled walls. Biggs, who is 41, had to take a day off from work to be there. He knew from experience that if he didn’t show up, he could be put in jail.
Before the morning’s hearing, he listened as defendants traded stories. One woman recalled how, at 4 months pregnant, she had reported a money order scam to her local sheriff’s office only to discover that she had a warrant; she was arrested on the spot. A radiologist had sued her over a $230 bill, and she’d missed one hearing too many. Another woman said she watched, a decade ago, as a deputy came to the door for her diabetic aunt and took her to jail in her final years of life. Now here she was, dealing with her own debt, trying to head off the same fate.
Biggs, who is tall and broad-shouldered, with sun-scorched skin and bright hazel eyes, looked up as defendants talked, but he was embarrassed to say much. His court dates had begun after his son developed lymphoma, and they’d picked up when his wife started having seizures. He, too, had been arrested because of medical debt. It had happened more than once.
Judge David Casement entered the courtroom, a black robe swaying over his cowboy boots and silversmith belt buckle. He is a cattle rancher who was appointed a magistrate judge, though he’d never taken a course in law. Judges don’t need a law degree in Kansas, or many other states, to preside over cases like these. Casement asked the defendants to take an oath and confirmed that the newcomers confessed to their debt. A key purpose of the hearing, though, was for patients to face debt collectors. “They want to talk to you about trying to set up a payment plan, and after you talk with them, you are free to go,” he told the debtors. Then, he left the room.
The first collector of the day was also the most notorious: Michael Hassenplug, a private attorney representing doctors and ambulance services. Every 4 months, Hassenplug called the same nonpaying defendants to court to list what they earned and what they owned — to testify, quite often, to their poverty. It gave him a sense of his options: to set up a payment plan, to garnish wages or bank accounts, to put a lien on a property. It was called a “debtor’s exam.”
If a debtor missed an exam, the judge typically issued a citation of contempt, a charge for disobeying an order of the court, which in this case was to appear. If the debtor missed a hearing on contempt, Hassenplug would ask the judge for a bench warrant. As long as the defendant had been properly served, the judge’s answer was always yes. In practice, this system has made Hassenplug and other collectors the real arbiters of who gets arrested and who is shown mercy. If debtors can post bail, the judge almost always applies the money to the debt. Hassenplug, like any collector working on commission, gets a cut of the cash he brings in.
Across the country, thousands of people are jailed each year for failing to appear in court for unpaid bills, in arrangements set up much like this one. The practice spread in the wake of the recession as collectors found judges willing to use their broad powers of contempt to wield the threat of arrest. Judges have issued warrants for people who owe money to landlords and payday lenders, who never paid off furniture, or day care fees, or federal student loans. Some debtors who have been arrested owed as little as $28.
More than half of the debt in collections stems from medical care, which, unlike most other debt, is often taken on without a choice or an understanding of the costs. Since the Affordable Care Act of 2010, prices for medical services have ballooned; insurers have nearly tripled deductibles — the amount a person pays before their coverage kicks in — and raised premiums and copays, as well. As a result, tens of millions of people without adequate coverage are expected to pay larger portions of their rising bills.
The sickest patients are often the most indebted, and they’re not exempt from arrest. In Indiana, a cancer patient was hauled away from home in her pajamas in front of her three children; too weak to climb the stairs to the women’s area of the jail, she spent the night in a men’s mental health unit where an inmate smeared feces on the wall. In Utah, a man who had ignored orders to appear over an unpaid ambulance bill told friends he would rather die than go to jail; the day he was arrested, he snuck poison into the cell and ended his life.
With hardly any oversight, even by the presiding judge, collection attorneys have turned this courtroom into a government-sanctioned shakedown of the uninsured and underinsured, where the leverage is the debtors’ liberty.
Seated at the front of the courtroom, Hassenplug zipped open his leather binder and uncapped his fountain pen. He is stout, with a pinkish nose and a helmet of salt and pepper hair. His opening case this Tuesday involved 28-year-old Kenneth Maggard, who owed more than $2,000, including interest and court fees, for a 40-mile ambulance ride last year. Maggard had downed most of a bottle of Purple Power Industrial Strength Cleaner, along with some 3M Super Duty Rubbing Compound, “to end it all.” His sister had called 911.
Maggard took his seat. He had cropped red hair, pouchy cheeks, and mud-caked sneakers. “The welfare patients are the most demanding, difficult patients on God’s earth,” Hassenplug told me, with Maggard listening, before launching into his interrogation: Are you working? No. Are you on disability? He was diagnosed with schizoaffective disorder, bipolar type, and anxiety. Do you have a car? No. Anyone owe you money you can collect? I wish.
They had been here before, and they both knew Maggard’s disability checks were protected from collections. Hassenplug set down his pen. “Between you and me,” he asked, “you’re never going to pay this bill, are you?”
“No, never,” Maggard said. “If I had the money, I’d pay it.”
Hassenplug replied, “Well, this will end when one of us dies.”
Though debt collection filings are soaring in parts of America, Hassenplug speaks with pride about how he discovered their full potential in Coffeyville long before. A transplant from Kansas City, he was a self-dubbed “four-star fuck-up” who worked his way through law school. He moved to Coffeyville to practice in 1980 and soon earned a reputation as a hard ass. He saw that his firm, Becker, Hildreth, Eastman & Gossard, hadn’t capitalized on its collections cases. The lawyers didn’t demand sufficient payments, and they rarely followed up on litigation, he said. Where other attorneys saw petty work, Hassenplug saw opportunity.
Hassenplug started collecting for doctors, dentists, and veterinarians, but also banks and lumber yards and cities. He recognized that medical providers weren’t being compensated for their services, and he was maddened by a “welfare mentality,” as he called it, that allowed patients to dodge bills. “Their attitude a lot of times is, ‘I’m a single mom and … I’m disabled and,’ and the ‘and’ means ‘the rules don’t apply to me.’ I think the rules apply to everybody,” he told me.
He logged his cases in a computer to track them. First with the firm and later in his own practice, he took debtors to court, and he won nearly every time; in about 90% of cases nationally, collectors automatically win when defendants don’t appear or contest the case. Hassenplug didn’t need to accept $10 monthly payments; he could ask for more, or, in some cases, even garnish a quarter of a debtor’s wages. His fee was, and often still is, one-third of what he collects. He asked the court to summon defendants, over and over again. It was the judge’s contempt authority that backed him, he said. “It’s the only way you can get them into court.”
When Casement took the bench in 1987, after passing a self-study exam, he didn’t know much legalese — he had never been in a courtroom. But attorneys taught him early on that the power of contempt was available to him to punish people who ignored his orders. At first, Casement could see himself in the defendants. “I was a much more pro-debtor aligned judge, much more sympathetic, much less inclined to do anything that I thought would burden them,” he told me. “And over the years, I’ve gradually moved to the other side of the fulcrum. I still consider myself very much in the middle, and I don’t know if I am or not.”
Once a bustling industrial hub, Coffeyville has a poverty rate that is double the national average, and its county ranks among the least healthy in Kansas. Its red-bricked downtown is lined with empty storefronts — former department stores, restaurants and shops. Its signature hotel is now used for low-income housing. “The two growth industries in Coffeyville,” Hassenplug likes to say, “are health care and funerals.”
In some courthouses, like Coffeyville’s, collection attorneys are not only invited to decide when warrants are issued, but they can also shape how law is applied. Recently, Hassenplug came to believe that debtors were only attending every other hearing in a scheme to avoid jail, and he raised his concern with the judge. He suggested that the judge could fix this by charging extra legal fees; Casement wrote a new policy explaining that anyone who missed two debtor’s exam hearings without a good reason would be ordered to pay an extra $50 to cover the plaintiff’s attorney fees. If they didn’t pay, they would be given a two-day jail sentence; for each additional hearing that they missed, they would be charged a higher attorney fee and get a longer sentence.
Most states don’t allow contempt charges to be used for nonpayment, and some, like Indiana and Florida, have concluded that it is unconstitutional. Michael Crowell, a retired law professor at the University of North Carolina and an expert in judicial authority, reviewed Casement’s policy. “You can’t lock people up for contempt for failing to pay unless you have gone to the trouble to determine that they really have the ability to pay,” he said. Casement told me he hadn’t made findings on ability to pay before ordering defendants to foot attorney’s fees, “but I know that’s something the court should consider,” he said. He also made plain why he wrote the policy: “Mr. Hassenplug and Brehm’s outfit have asked me to.” (Brehm denied she requested this.)
Casement has not done everything the debt collection lawyers have suggested. At first, he agreed to their requests to set bail at the amount of the debt, but he eventually settled on $500. “Most people can come up with $500,” he said. “It may not be their money, but they know someone who will pay.” He made sure no one was arrested unless they’d been reached by personal service or certified mail.
Kansas law allows courts to order debtors in “from time to time,” leaving discretion to judges. Casement limited the frequency of Hassenplug’s debtor’s exams to once every 3 months. He came to the decision by his own logic around what seemed like a reasonable burden for defendants, and it remains his personal policy today. The law also states that anyone found to be disabled and unable to pay can only be ordered to appear once a year. Without an attorney, debtors like Kenneth Maggard don’t know to assert this right.
Allowing bail money to count toward collections raises some of the most critical legal questions. Hassenplug told me that he thinks it’s great that cash bail is applied to the debt. “A lot of times, that’s the only time we get paid, is if they go to jail,” he said. Peter Holland, the former director of the Consumer Protection Clinic at the University of Maryland Law School, explained that this practice reveals that the jailing is not about contempt, but about collection. “Most judges will tell you, ‘I’m working for the rule of law, and if you don’t show up and you were summoned, there have to be consequences,'” he explained. “But the proof is in the pudding: If the judge is upholding the rule of law, he would give the bail money back to you when you appear in court. Instead, he is using his power to take money from you and hand it to the debt collector. It raises constitutional questions.”
Shea, from ARSI, said that using the legal process is time-consuming and costly — a last resort; arrests are “the least desirable stage for any case to reach for all involved.” Even after lawsuits are filed, they try to connect eligible debtors with the Coffeyville hospital to apply for financial assistance, he said. Last year, the hospital wrote off $1.7 million in charity care, said Bell, the hospital lawyer. “That is evidence of a hospital that cares.”
Casement said he did not consider the legality of his policies a problem. He placed some blame on the healthcare system. “What we have isn’t working,” he said. “As a lifelong Republican, I would probably be hung, but I think we need healthcare for everybody with some limits on what it’s going to cost us.”
Debt collection is an $11 billion industry, involving nearly 8,000 firms across the country. Medical debt makes up almost half of what’s collected each year. Today, millions of debt collection suits are overwhelming state courts. The practice is considered a “race of the diligent,” where every creditor is rushing to the courthouse, hustling to get the first judgment, in order to be the first to collect on a debtor’s assets. In Hassenplug’s view, though, this work is not the rich taking from the poor. He laughed at how locals spread rumors, saying that he seized wheelchairs or Christmas trees. Once, he confessed, he took a man’s Rolex, only to find out it was a fake. Some months, he said, even his law office could not make ends meet.