A ground breaking multi-part series in this week’s Baltimore Sun shines some light on the debt collection practices used by hospitals, even hospitals that accept government charity care payments for patients who can’t pay their bills.

An eight-month investigation by The Sun found that over the past five years some of Maryland’s 46 nonprofit hospitals have received millions of surplus dollars from the payment system even as they sued tens of thousands of patients over unpaid bills. Many of these suits have been filed against patients in the poorest areas of the state.

With more than 132,000 cases filed against people in Maryland alone, and at least $100 million in judgements against hospital patients, it’s no wonder that medical care has become a top cause of bankruptcy.

While the numbers tell a story of national implications for our uncertain economy, the individual stories tell us of a debt collection bureaucracy with no oversight and little ethical constraint.

White had health insurance, but it didn’t cover the bulk of her care. When bills started showing up about a month after her discharge, she signed up for the financial assistance program commonly called charity care.

A few months after her discharge, Hopkins sent her a ruling on her request for assistance that read, “Your responsibility is zero,” according to court records. White said she rejoiced.

“I was saying, ‘Oh gee, thank the Lord, because any time you have an operation like this, you know it’s going to be a lot,'” she said.

But the bills kept coming. When her daughter asked why, the hospital said that charity care only covered one day’s charges. Hopkins officials said it was possible for charity care to be approved for one day.

In January 2007, Bayview sued White in Baltimore City Circuit Court, stating in part that she “refuses to pay the amount due.” That comment bothered White, who mailed a typed note to the court stressing that she “never refused to pay the bill,” but simply didn’t have the money to do so.

She said that she was “grateful” to the Hopkins surgeon who “saved my life” but that she and her husband, Charles, got by on $1,080 a month from Social Security and $152 in food stamps. “I have a little checking account that I pay my bills from. There is a little over $1,000 in that; so you see I’m in no position to pay all this money for the hospital bill,” she wrote.

A month later, White asked the hospital again for financial aid, but was told the bills were “too old” to be eligible, according to hospital records.

The State of Maryland pays hospitals a charity care payment each year to make up for the bills that people can’t pay themselves. But not every state has such a system, and it is likely that debt collection efforts are even more fierce elsewhere. One Maryland hospital reported that it could sue people who have a mortgage, while another reported considering suits against people who have two cell phones and a savings account. Well, that could be any of us.

Take a look at the second part in the series here–where the Sun follows poor debtors through the legal process against a cadre of specialized law firms. Third part coming soon.