Class-action lawsuit in federal court alleges illegal debt collection scheme by Corewell Health 

Corewell Health, one of Michigan’s largest healthcare systems with 21 medical facilities statewide — encompassing more than 5,000 hospital beds and 60,000 employees — is being sued along with Delaware-based debt collection agency DCM Services, LLC in federal district court for allegedly trying to collect millions of dollars in medical bills that were already paid through insurance and government programs. 

The lawsuit, a class-action suit filed Friday in U.S. District Court in Detroit, alleges that Corewell and DCM engaged in fraud and violated state debt collection and consumer protection laws, among other claims. 

That practice, which the complaint calls “balance billing,” means that 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.” 

Legally, the complaint continues, after accepting those claims, 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, listing 19 hospitals where the plaintiffs allege the practice is being used, ranging from Big Rapids in West Michigan to a number of hospitals in Wayne County. 

Neither Corewell Health nor DCM Services, LLC responded to requests for comment by the time of publication. 

The lawsuit was brought by Michelle Rzanca as a 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 the medical services that he received before entering a payment contract with his insurer, Blue Cross Blue Shield PPO. Among the exhibits in the complaint is a copy of a billing statement from the hospital noting a payment of $19,448.92 listed as “Contractual Adjustment (Insurance).”

Despite that payment, the complaint states that Corewell Health claimed that the Field Estate still owed it a debt of $42,160.70 for the remaining unpaid balance, referring that debt to DCM Services for collection. 

“The contract prohibited Defendant Corewell from holding a BCBS-insured patient liable for any payment or fees that were the legal obligation of BCBS. Defendant Corewell could not bill, charge, collect from, seek compensation, remuneration or reimbursement from, or have any recourse against an insured patient for a covered medical service,” the complaint states.