Federal Lawsuit Accuses Corewell Health of Illegal Medical Debt Collection
Major Michigan healthcare system accused of collecting medical bills already paid by insurance in federal class-action lawsuit.
DETROIT, MICHIGAN — Corewell Health, one of Michigan’s largest healthcare systems, faces a federal class-action lawsuit alleging the organization illegally collected millions of dollars in medical bills that were already paid through insurance and government programs.
The lawsuit, filed Friday in U.S. District Court in Detroit, targets both Corewell Health and Delaware-based debt collection agency DCM Services, LLC for allegedly engaging in fraud and violating state debt collection and consumer protection laws.
Corewell Health operates 21 medical facilities statewide with more than 5,000 hospital beds and employs 60,000 people across Michigan.
Balance Billing Practice Challenged
The complaint centers on what it calls “balance billing,” a practice where Corewell Health “submits claims for payment to insurers, group health plans, Medicare, or Medicaid and accepts reduced payments under negotiated agreements and governing law as payment in full for covered services.”
According to the lawsuit, after accepting those reduced payments, Corewell “cannot bill, charge, collect from, seek compensation, remuneration or reimbursement from, or have any recourse against the patient for covered medical services.”
The complaint alleges balance billing is a “routine and systematic practice” of Corewell Health across 19 hospitals, ranging from Big Rapids in West Michigan to multiple facilities in Wayne County.
Estate Files Suit After Patient Death
Michelle Rzanca brought the lawsuit as personal representative for the estate of Jordan Field, a Michigan resident who died after receiving emergency medical services at Corewell Health Butterworth Hospital in Grand Rapids in March 2024.
Corewell billed over $61,600 for Field’s medical services before entering a payment contract with his insurer, Blue Cross Blue Shield PPO. Court documents include a billing statement from the hospital showing a payment of $19,448.92 listed as “Contractual Adjustment (Insurance).”
The case highlights broader concerns about medical debt collection practices at major healthcare systems, particularly when insurance companies have already negotiated reduced payment rates for covered services.
Neither Corewell Health nor DCM Services, LLC responded to requests for comment by the time of publication.
