Two Colorado residents and UCHealth patients filed a proposed class-action lawsuit in Denver District Court against the hospital’s debt collection agency over unfair and intrusive practices.

The lawsuit against Credit Services Company, Inc. — in collaboration with Towards Justice, the National Consumer Law Center and Vedra Law LLC — was announced Monday.

“At a time when Coloradans face a raging pandemic and devastating financial pressures, the extraordinarily profitable medical debt collection industry must stop preying on Colorado’s working families,” said David Seligman, executive director of Towards Justice.

UCHealth, the largest health care system in Colorado, often uses debt collectors, including CSC, who sue patients with outstanding medical debts.

Costs of COVID care are complex for patients, insurers, hospitals

Plaintiff Catherine Woods-Sullivan said she received medical care from UCHealth and got a bill for thousands of dollars. She knew immediately she’d struggle to pay the bill.

“When I tried to communicate with UCHealth about it, they told me there was nothing they could do. I had to talk to a private, for-profit debt collector called CSC,” Woods-Sullivan said. “About a year after my medical trauma, CSC sued me.”

The class-action complaint described CSC’s debt collection tactics as “aggressive and predatory.”

“By transferring responsibility for collection of accounts in default to CSC, UCHealth avoids having to place its own name on thousands of debt collection lawsuits,” the complaint reads.

Citing unsafe working conditions and understaffing, UCHealth workers announce union push

The lawsuit alleges that CSC operates as if it has purchased the patients’ medical debt from UCHealth, which it claims CSC is not permitted to do because it does not comply with Colorado debt buyer rules and medical debts arise from confidence between a patient and doctor.

The plaintiffs also claim that CSC frequently communicates with the patients about sensitive medical and financial information.

“I wouldn’t wish this experience on anyone,” said plaintiff Zachary Waite, who was sued by CSC. “I’m fighting to make sure it doesn’t happen to anyone again.”

Medical debt is the leading cause of personal bankruptcy in the United States, according to the Consumer Financial Protection Bureau.