This small-town Ohio hospital sued 2,700 patients in two years for unpaid medical bills

BELLEFONTAINE, Ohio – One by one, Mary Rutan Hospital’s former patients, some wearing bandages or warning that their replacement knee might set off the metal detector, shuffled into an unassuming municipal courthouse on the edge of downtown. 

The people who showed up to Bellefontaine Municipal Court on a recent Thursday met with one of three lawyers representing the only hospital in Logan County, population 46,500. Virtually none of the former patients had lawyers of their own. 

But most defendants in the Mary Rutan cases didn’t appear. A magistrate, at the request of the hospital, entered default judgments (losses in absentia) against about 10 no-shows, one after another. 

Every default judgement sets the hospital up to take, or “garnish,” 25% of the defendants’ paychecks until they pay off the hospital bill and court costs, plus an 8% annual interest rate determined by state law. 

Almost every case on that Thursday docket came from Mary Rutan, a 106-year-old hospital that, as a nonprofit, is exempt from state and federal taxes. Each lawsuit was a small piece of the hospital’s recently ramped-up strategy to lean on its patients through the courts to pay their bills. 

Between 2000 and 2023, Mary Rutan sued fewer than 400 former patients per year on average across both municipal and county court, according to an analysis of court data. 

But since the beginning of last year, Mary Rutan has sued nearly 2,700 patients and counting. 

Debts ran as low as $215 and as high as $153,000. Dozens were for less than $1,000. The Municipal Court cases target about $3,000 of debt per patient, according to a sampling of about 230 cases we reviewed. In all but one case, court records show these defendants had no attorney to represent them.

In Logan County court, which handles bigger cases, the average bill pursued by the hospital is about $26,000.

The hospital is driving a massive increase in the caseload of the municipal court docket, records show. So far this year, nearly two in three civil cases filed in Bellefontaine Municipal Court have come from Mary Rutan, which has already filed more cases this year than it had in all of last year, with three months remaining in 2025.

Hospitals vary in their treatment of people with unpaid medical debt, but several experts suggested in interviews that Mary Rutan Hospital, about an hour west of Columbus, was in a league of its own. 

Mary Rutan Hospital CEO Chad Ross declined interview requests, as did the hospital’s two outside attorneys who handle most of its collection actions.

But in a lengthy statement, Ross said the hospital offers generous financial assistance, charitable care, and flexible payment plans, plus other care that’s undercompensated by Medicare and Medicaid. 

He attributed the recent spike in cases to varying factors, including a backlog of deferred cases during the pandemic and different legal changes that shape the timing of lawsuits or might require the same person to be sued by the hospital in multiple separate lawsuits instead of just one.

He said Mary Rutan must remain “fiscally responsible” to continue to serve the community. 

“Like many community hospitals, we depend on patient payments as part of keeping our doors open,” he said. “This allows us to keep services local, recruit and retain staff and invest in new equipment and technology. Turning to collections is always a last resort – only after we have worked to offer patients every available alternative.”

Read the full statement from Mary Rutan Hospital CEO Chad Ross here.

Signal Ohio has interviewed 17 Mary Rutan patients-turned-defendants, plus others familiar with the hospital’s billing practices. We also reviewed court files of thousands more patients. Many described confusion or disagreement over how much they owed, why they owed it, and why their insurance didn’t cover the costs of care. They talked about the struggle of getting simple accounting information from the hospital or debt collector. Some said they didn’t know they had been sued until their paychecks were garnished. 

Many knew others around town who were also sued by the hospital. For instance, Chelcie Norris was sued for $1,300. Her husband, James, was sued for $9,000. Both had their wages garnished. 

Courtney Henderson, a factory supervisor, said she has helped her current employer’s administrative staff facilitate garnishments of multiple coworkers for Mary Rutan. She herself has been sued twice recently by the hospital and just finished paying off a $1,300 court judgment after the hospital garnished 25% of her paycheck, or about $600 to $800 a month.

“It just seems like every week I’m being told one person’s garnishment is ending and another is starting,” Henderson said.

Mary Rutan wields clout in the community. It’s one of the top employers in Logan County. It files its lawsuits via two local attorneys, one of whom, Zebulon Wagner, is the Bellefontaine City Council president. And Wagner works at TDH Law (Thompson, Dunlap & Heydinger), a firm that previously employed the hospital’s current CEO. 

About half of American adults keep a three-month emergency savings fund, according to the Federal Reserve. But for many living paycheck to paycheck, including some of those interviewed by Signal Ohio, a car crash or unexpected illness is enough to trigger financial ruin. 

‘Do not take me to that place’ 

Tuff Kline, 31, is a cosmetologist at Kut N Loose in town. In September 2022, she was diagnosed with an ectopic pregnancy, a painful and dangerous condition that occurs when a fertilized egg implants outside the uterus. This caused internal bleeding and required outpatient surgery on short notice. 

It struck during a three-week gap after Kline left her private insurance and before she enrolled on her husband’s, she said in an interview. 

She said she tried to set up a payment plan, but the hospital wanted $1,500 a month, far more than she could afford. 

Mary Rutan sued Kline in common pleas court earlier this year for $31,407. She considered hiring an attorney, but questioned why she’d spend more money when she’s already deep in debt.

Instead, she negotiated a payment plan on her own. She owes $130 per week toward the full bill, plus $400 in court costs, all against the 8% annual interest rate set in law. It’ll take nearly six years to pay off for a total cost of around $39,000. 

If the hospital cared about a tragic and dangerous end to her pregnancy, the billing department didn’t show it, Kline said. 

“I’ve made it very clear to anybody and everybody around me, even if I am dying and I will die in five minutes, do not take me to that place,” she said.  “Just the way they treated me from the minute I had surgery to the minute they sued me. It’s just been nothing but negative, not good, just unhuman. They just have no compassion anymore.”

Bankruptcy only option for some

Court records show that most of the time, the hospital gets its money one way or another. Sometimes patients pay in full and the hospital drops the case. Sometimes all parties agree to a payment plan. Most often, wages are “garnished.”

A rare exception comes in the handful of cases where patients declare bankruptcy to shed the unpaid bills. 

Dustin Overly, a contractor who said he had health insurance at the time, was clearing out a beaver dam when he got his foot stuck and fell backward awkwardly. He dislocated his knee and tore a ligament on the way down. After two surgeries, a year and a half of physical therapy, and a layoff from a contracting job, Mary Rutan successfully sued him for $23,209 in March 2024.

While declaring bankruptcy destroyed his chances of buying a home any time soon, he said it was his only option. 

“I wasn’t too proud of it, but I don’t have $25,000 hanging around either,” he said. “I don’t think it played out the way I figured it was going to play out at all. Injuries happen, sometimes they just catch you off guard. But a small injury can turn out to be a big pain, I guess.”

Signal Ohio identified at least one other person being sued by Mary Rutan who notified the courts of a bankruptcy. His attorney didn’t respond to an inquiry. 

‘I feel helpless’

In court on a recent Thursday, one woman appeared and asked to address a magistrate in a formal hearing. Speaking faintly, she said she suffered a “brain injury” and asked for a delay in the lawsuit against her. Hospital lawyers, and the magistrate, obliged. 

In interviews, several patients reported being unable to verify medical charges after Mary Rutan notified them of unpaid bills. Henderson, the factory supervisor, said Mary Rutan sued her over an $809 bill in 2022 and again for $1,300 in 2024. 

She was confused that she owed any money at all because, both times, she was covered through Medicaid, the government-funded health care program for the poor and disabled. But the charges were from so long ago that she couldn’t verify them through her Medicaid plan providers. 

Henderson just finished paying off the second lawsuit. But she said the strain of having 25% of her paycheck garnished made her unable to save enough money to find a new home large enough for her whole family when she recently had to move unexpectedly.

“I got stuck with paying it. And I don’t know where this all is coming from,” Henderson said.

An employee at Mary Rutan Hospital, who asked not to be named in this article, thought she had settled her debts with the hospital after she was sued over a $17,100 bill. She said she refinanced her home to pay the tab; she thinks the charges were related to the birth of her daughter. 

Then Mary Rutan sued her again last year for $5,700, for which she negotiated a payment plan. She said hospital officials also have informed her that she owes $22,000 in unpaid pediatric bills. She hasn’t been sued for that yet.

The employee incurred tens of thousands of dollars of debt even though she said she had insurance coverage – through Medicaid for the first wave of charges and through her husband’s employer for the second.

“I feel helpless,” she said.

‘I think it does incredible damage to our community’

Matthew Curry is a lawyer in Delaware, Ohio, who previously helped banks foreclose on homes and collect on other debts. Now, he defends people who are being sued over debts. 

In an interview, Curry said he’s handled about a dozen Mary Rutan Hospital cases. He said the lawyers that represent Mary Rutan are responsive and willing to accept payment plans, which can help people avoid the financial damage of a court judgment against them. 

But unlike other creditors, Mary Rutan is unwilling to settle for less than the full amount owed, he said. 

Curry said he’s been shocked by the number of lawsuits Mary Rutan has filed against its patients over unpaid debts. Most hospitals, he said, send unpaid bills to collections and accept whatever they can get.

“The sheer volume, I’ve never seen anything like it,” Curry said. “Not on medical billing.” 

Are you being sued for unpaid medical debt? We asked experts what you can do about a hospital bill you can’t pay. Read about it here. 

Amanda Capehart is a former paralegal for the law firm of Smith, Smith, Montgomery & Chamberlain, which handles a majority of Mary Rutan’s debt collection lawsuits. 

In an interview, Capehart said she has personally struggled with health care costs and sympathizes with patients who told her they couldn’t afford their bills or get clear information from the hospital or their insurer. 

She left the firm on moral grounds and now works for another lawyer in town.

“And that’s why I had to quit. Like I couldn’t do it to people anymore. It was awful,” Capehart said. “It would be one thing if it was a credit card loan or a car loan, but no, this is people getting health care and typically they probably don’t have insurance and that’s why they have to go to the emergency room.”

Andy Stahl, a behavioral health therapist, has worked for Mary Rutan as a provider. But it was health care for his three children that turned him into a defendant against the hospital. Acting as his own attorney, he fought the hospital in court, challenging what he said were suspect line items on his bill and whether the hospital properly served him a court summons. 

He lost and was ordered to pay $1,628. In an interview, he said he’s thankful he was able to pay up and settle without any kind of garnishment. But many aren’t so lucky. While he doesn’t think the hospital is doing anything illegal, he questioned the morality of a health care provider suing its patients en masse.  

“I think that it is excessive. I think it does incredible damage to our community,” Stahl said. “It creates a lack of trust in the local health care system – the only health care system in here. … I imagine it indirectly has caused deaths or injury, because people aren’t going to go back when they need care because a lot of people can’t afford it. Most people don’t have thousands of extra dollars to pay.”

Trying to survive

Medical debt is a unique financial problem for a few reasons, said Ruth Lande, a former hospital billing administrator who now works with Undue Medical Debt, a nonprofit that raises funds to help buy Americans out from towering medical bills. 

For one, it comes up fast and often without warning. And even when planned in advance, costs are difficult if impossible to compare. The financial risks are highest for the roughly 6.4% of Ohioans who have no health insurance. 

But even for those with insurance, copays, coinsurance, out-of-network surcharges and other add-ons have shifted health care costs from insurers to consumers. She said that’s how people wind up a few hundred dollars in arrears. 

“That’s a very common amount, around $1,200,” Lande said. “Employer-based deductibles are often several thousand [dollars], and that’s exactly what people don’t have.”

Mary Rutan’s policy, as is a best practice in the industry, is to only sue if the debtor “appears to have assets to pay the bill.” 

The policy is messier in practice. The hospital sued Malia Pyles in June for $5,713 for failure to pay her bills related to a 2020 diagnosis of C. Difficile, a bacterial infection that causes miserable gastrointestinal distress. She was making $13 an hour at the time in a factory job. She said she has taken out a loan against her house to pay on a $192 per-month plan. 

Mary Rutan sued Heath Keckler in 2022 after he failed to pay a $2,400 medical bill. These days, he pays the hospital $100 per month, even as he receives disability pay following a kidney transplant. He said he “basically had no say” in the matter. 

Lande said most hospitals in her experience don’t sue their patients over unpaid bills.

“I think any justification for suing comes from an idea that there are people out there with plenty of cash who are not paying their medical bills,” Lande said. “So if you believe that, then you believe that suing is reasonable. However, that’s really not the case that I’ve ever seen.”

And then there’s hospitals’ core mission: helping patients. Lande said she worries about what happens when fear of debt turns into people declining necessary health care. 

Mary Rutan is the only hospital within a 30-minute drive of the town. The sparse population leaves the independent hospital in a weak bargaining position against insurers who pay for most services, several experts said in interviews. 

Andy Engel, a Columbus attorney, worked for his family’s debt collection company in Southwest Ohio, mostly representing hospitals. 

He said the lawsuits might be the hospital’s way of “training” people against using emergency rooms as a source of primary care. 

While the widespread garnishment surely hurts the community, everybody benefits when the hospital remains open, he said. In his opinion, the stingy reimbursement rates from Medicaid and Medicare are at the root of the medical debt trap, not the patients or the hospital. 

“My guess is they’re in dire straits and they want people to understand they’re not doing this because they’re mean, nasty individuals,” he said. “They’re trying to survive.”

Mary Rutan runs a profit most of the time

Mary Rutan’s tax records show it’s a profitable operation, albeit on thin margins. Over the decade ending in 2023, it averaged $4.4 million in profit per year. That’s a profit margin of about 4%. But it reported a $6.6 million net loss in 2022, its first since the Great Recession. 

Ross, the hospital’s CEO, didn’t respond to specific questions, and his statement doesn’t directly address the hospital’s financial health. 

He said too many Americans are uninsured or underinsured, exposing them to surprising and hefty medical bills. He said the hospital last year provided $21.8 million in uncompensated care, including charity care and losses associated with Medicare and Medicaid shortfalls.

“Importantly, Mary Rutan Health follows all federal and state guidelines for billing and collections, and we are committed to treating every patient with fairness and respect throughout the process,” he said. 

Tax records over the most recent decade available show the hospital has written off an average of $3.3 million each year of the past decade in “bad debt,” meaning money it’s owed but likely will never see. (This accounting doesn’t stop the hospital from trying to collect on the debt.) 

The bad debts have been increasing since the pandemic. That’s part of a statewide trend, according to John Palmer, a spokesman for the Ohio Hospital Association. 

Citing data from the American Hospital Association, he said that 41% of U.S. adults have health care debt if you include credit cards and debts to family. Fourteen million people in the U.S. owe more than $1,000 in medical debt, and about 3 million people owe medical debt of more than $10,000.

When medical debt comes for a former debt collector

Rhonda Chamberlain used to work for Mary Rutan’s debt collections arm. Now, she’s paying $130 a month to the hospital after Mary Rutan sued her for $6,800 last year.

The debt traced back to physical therapy Chamberlain received following a motorcycle accident in 2019, she said in an interview. By then, she no longer worked for Mary Rutan. She was uninsured when she injured her neck and hip.  

She said she didn’t pay her bill while her lawyer negotiated with the insurance company of the driver who caused her accident. She said her lawyer also hoped to get nearly $2,000 in interest removed but was unsuccessful.

Part of Chamberlain’s repayment involved a $2,500 lump sum, which she got under a renter’s insurance payout she received after an apartment fire. 

She struggled to find a new place she could afford on the $34,000 she makes a year as a school custodian. Eventually, friends agreed to rent her and her son a couple rooms. Her expenses, including her monthly payment to Mary Rutan, make it hard for her to afford food. Her friends help her make ends meet by sharing theirs.

Chamberlain teared up as she described her friends’ generosity, saying it prevented her from being homeless. She thinks she’ll have her medical debt paid off in two or three years.

“$130 is a lot of money to me. It might not sound like a lot to other people, but it is,” she said.