I. Overview

Unpaid private hospital bills in the Philippines are primarily a civil debt – a money obligation arising from services rendered (medical treatment, room, medicines, procedures).

Key ideas:

Non-payment of hospital bills is not, by itself, a crime.
A private hospital may legally pursue collection, usually through:
- Demand letters and negotiations
- Collection agencies
- Civil cases (including small claims)
- Enforcement of judgments (garnishment, levy on property)
Hospitals cannot detain patients or cadavers for non-payment, but they can still sue.

II. Legal Nature of Hospital Bills

1. Contractual relationship

When a patient is admitted:

The patient (or representative) usually signs:
- Admission agreement
- Consent forms
- Sometimes a promissory note or undertaking
This creates a contract of services between patient and hospital/doctor.

Under the Civil Code:

The patient (debtor) is obliged to pay.
The hospital/doctor (creditor) is obliged to render proper care, within professional standards.

Most hospital bills are written contracts, so the usual prescriptive period for filing an action to collect is:

10 years from when the cause of action accrues (typically from final billing or breach of a promissory note), for written contracts.

If the agreement is purely verbal, the prescriptive period is shorter (generally 6 years), but in practice, major hospital admissions are documented.

III. Who Can Be Sued for Unpaid Bills?

1. The patient

The primary liable party is the patient. Even if relatives initially paid deposits, the obligation normally attaches to the person who received the services.

2. Spouse / family members

Family members are not automatically liable, but may be liable if:

They signed as:
- Co-debtor
- Solidary obligor
- Guarantor
- “Responsible party” or “payor” in the admission papers
They executed a promissory note or guarantee letter.

Spouses may have obligations depending on the property regime (absolute community, conjugal partnership), especially if hospital expenses can be considered family or conjugal expenses. But even then, liability of the non-patient spouse usually rests on what they actually signed.

3. Employer / HMO / Health plan

Liability of an employer, HMO, or health plan:

Depends on contractual coverage:
- Company health benefit
- HMO/insurance policy terms
- Limitations, exclusions, caps
The hospital may bill directly to HMO/insurance.
Any amount not covered falls back on the patient / signatory.

4. Minors and incapacitated patients

For minors or incapacitated patients:

Parents or guardians who contracted the services or signed the documents are typically the legal debtors.
If the minor signed but was clearly underage, courts will look at:
- Who actually arranged the admission
- Who signed as “parent/guardian” or “responsible party”

IV. Legal Framework Specific to Hospital Bills

1. Civil Code on obligations and contracts

Relevant Civil Code principles:

Obligations must be fulfilled according to their terms.
If the debtor fails to pay, the creditor can:
- Demand performance (payment)
- Claim damages, interest, attorney’s fees (if justified)
Solidary liability: if several parties sign as solidary obligors, the hospital may sue any one of them for the full amount.

2. Constitutional safeguard: No imprisonment for debt

The 1987 Constitution prohibits imprisonment for non-payment of debt.

Implication:

You cannot be jailed just because you failed to pay your hospital bill.
But you can:
- Be sued,
- Lose in court,
- Have your assets or income garnished through lawful execution.

3. Anti-Hospital Detention Laws (RA 9439 and RA 10932)

These laws:

Prohibit hospitals from:
- Detaining recovered patients
- Detaining cadavers of deceased patients solely because of non-payment of bills, if certain conditions are met.
Require hospitals to:
- Allow discharge upon signing of promissory notes or mortgage of property, or upon securing a PhilHealth guarantee, etc., in covered cases.
- Release cadavers under similar safeguards.

Important nuance:

These laws do not cancel the debt.
They only prohibit detention as a collection tactic.
Hospitals remain free to pursue legal collection afterwards.

4. PhilHealth and “No Balance Billing”

PhilHealth and universal health care rules provide:

PhilHealth coverage for certain procedures, confinement, and professional fees, subject to case rates or benefit packages.
“No Balance Billing” for certain indigent or sponsored members in accredited government facilities – but in private hospitals, standard rules on balance billing usually apply unless a specific policy says otherwise.

Key point: Whatever PhilHealth/HMO does not cover becomes part of the patient’s personal obligation, unless other arrangements are made.

5. Data Privacy in collections

Hospitals must follow data privacy laws when:

Sharing patient information with collection agencies or lawyers.
Using patient data for billing and collection.

In practice:

Hospitals may endorse accounts to third-party collectors, but they must limit disclosure to what is necessary for collection and secure the data properly.

V. How Hospitals Typically Pursue Unpaid Bills

1. Internal billing and follow-up

Common steps before litigation:

Final billing at discharge.
If short of funds, patient or family may:
- Apply for discounts, social service, or charity assistance (if available).
- Sign a promissory note or partial payment plan.
After discharge, if unpaid:
- Phone calls, emails, text reminders
- Additional billing statements or notices

2. Demand letters

If substantial amounts remain unpaid:

The hospital or its lawyer will send a formal demand letter indicating:
- Amount due
- Possible penalties/interest
- A deadline for payment
- Warning of possible legal action

A formal demand is important because:

It shows default (mora) on the part of the debtor.
It may affect:
- Computation of interest
- Entitlement to attorney’s fees and costs

3. Collection agencies

Hospitals may assign or outsource the account to:

A collection agency, which will:
- Call or message the debtor
- Send standardized demands
- Try to negotiate payment plans

Collection agencies cannot:

Harass, threaten, or shame the debtor in unlawful ways (e.g., public posting, contacting employers just to shame you, etc.).
Pretend to be a court or law enforcement.

VI. Civil Cases for Unpaid Hospital Bills

1. Small Claims Court

If the amount involved is within the monetary threshold set by the Supreme Court for small claims:

The hospital or its assignee may file a Small Claims case in the proper Municipal Trial Court.
Features of Small Claims:
- No lawyers appear for parties (in general rule, though lawyers may help prepare documents).
- Faster, simplified procedure.
- Decision is final, generally not appealable, though limited remedies may still exist in exceptional cases.
- The court may award:
  - Principal amount
  - Interest
  - Costs (and in some cases, contractual attorney’s fees)

The exact peso limit for small claims can change over time through Supreme Court issuances, so it should always be verified from the latest rules.

2. Ordinary civil action for sum of money

For larger amounts:

The hospital files an ordinary civil action for a sum of money in the proper trial court (Municipal Trial Court or Regional Trial Court, depending on amount).
Usual steps:
1. Filing of Complaint (with attached bills, agreements, promissory notes).
2. Issuance and service of Summons to the debtor.
3. Debtor files an Answer within the reglementary period.
4. Mediation / Judicial Dispute Resolution (JDR) in many courts.
5. Trial (presentation of evidence, witnesses).
6. Decision by the court.

If the debtor fails to answer:

The hospital can seek judgment by default, making it easier to obtain a favorable decision.

3. Mediation and settlement

Courts often push for amicable settlement:

Restructured payments
Lump-sum discount
Waiver of some interest/penalty in exchange for prompt payment

Many hospital collection cases are resolved through compromise agreements, which are then approved by the court and become enforceable like a judgment.

VII. Can You Be Criminally Charged for Unpaid Hospital Bills?

1. As a general rule – no.

In general:

Simple non-payment of hospital bills = civil liability only.
There is no specific criminal law punishing mere failure to pay a debt.

2. Exceptions (not specific to hospitals)

Criminal liability could arise in special situations, for example:

Bouncing checks:
- If the debtor issued a check to pay, knowing or subsequently allowing it to be dishonored, this may trigger criminal liability under the Bouncing Checks Law depending on circumstances.
Estafa (swindling):
- Very particular situations where a debtor may be prosecuted for fraud, e.g., using false identity or falsified documents to obtain services with intent to defraud from the beginning.

But these are not automatic and require specific elements of the crime. The mere fact that someone received treatment, signed documents, and later couldn’t pay is usually not estafa.

VIII. What Happens After the Hospital Wins the Case?

If the hospital (or collection agency as assignee) obtains a final judgment:

Court issues a Writ of Execution.
Sheriff may:
- Garnish bank accounts of the debtor.
- Garnish wages or salaries (subject to exemptions).
- Levy on non-exempt real or personal properties (e.g., vehicles, land), to be sold at auction.

Some property and income may be exempt from execution under the law (e.g., certain necessary personal items, portions of salaries), but this depends on specific statutory exemptions.

IX. Defenses and Issues a Debtor May Raise

Someone sued for hospital bills may raise defenses such as:

Billing errors or overcharging
- Incorrect computations
- Charges for procedures/medicines not actually given
- Double-billing or unauthorized items
Lack of consent / unauthorized treatment
- Procedures done without proper consent (subject to medical emergency exceptions)
Non-compliance with PhilHealth/HMO rules
- Failure of hospital to process PhilHealth correctly may be questioned, though this is often a separate issue.
Partial payments not properly credited
Invalid or forged signatures
- If the defendant never signed as guarantor or co-debtor.
Prescription
- If the hospital waited beyond the legal prescriptive period to file suit.
Improper party
- Suing a person who is not the contracting party and did not sign any undertaking.
Lack of proof
- Incomplete or inconsistent documentation of services, bills, or agreements.

Courts will evaluate documents and testimonies from both sides.

X. Rights of Patients and Debtors

1. Right not to be detained

Patients (and families of deceased patients) have the right:

Not to be detained or have a cadaver withheld solely due to unpaid bills, if conditions set by law (e.g., promissory note, guarantee, etc.) are met.

2. Right to information and documentation

Patients or their representatives can demand:

Itemized billing
Copies of:
- Admission records
- Consent forms
- PhilHealth claim forms
- Promissory notes and payment records

These documents are crucial for checking whether the amount being collected is correct.

3. Right to fair collection practices

Debtors are entitled to:

Freedom from harassment, threats, or unlawful “shaming” tactics.
Privacy regarding their medical condition and financial problems.

XI. Practical Steps If You Have Unpaid Hospital Bills

1. Before discharge

Talk to the hospital’s billing/credit and collection/social service office:
- Ask about discounts, charity, or socialized rates for financial hardship.
- Explore PhilHealth and other government assistance.
- Negotiate installment plans or promissory notes.
Make sure:
- You understand any document you sign.
- Terms (amount, installment schedule, interest) are clear.

2. After discharge but before legal action

If you receive reminders or demand letters:

Do not ignore them.
Check:
- If the amount is accurate
- If PhilHealth/HMO credits were properly applied
Try to:
- Propose a realistic payment plan.
- Ask for waiver or reduction of interest or penalties in exchange for regular payments.

3. If you receive a demand letter from a lawyer or collection agency

Read carefully:
- Amount claimed
- Basis (hospital name, dates, case number)
Verify with your own records.
Consider sending a written reply, especially if:
- You dispute the amount
- You need restructuring
- You want to clarify PhilHealth/HMO coverage

4. If you are actually sued

Once served with Summons and Complaint:

Note the deadline to file an Answer (or verified Response in small claims).
Do not ignore the case. Failure to respond can lead to default judgment.
If possible:
- Seek advice from a lawyer or legal aid office.
- Bring all related documents (bills, receipts, contracts, PhilHealth forms, text messages, letters, etc.).
Explore the possibility of settlement or compromise, which can reduce amounts or spread payments.

XII. Promissory Notes and Their Legal Effect

Promissory notes signed at discharge:

Are binding contracts:
- Specify amount due
- Payment schedule
- Sometimes interest and penalties
Non-compliance gives the hospital a clear cause of action.
If the note states solidary liability, each signatory may be liable for the entire amount to the hospital.

Always read before signing:

Check if interest rate is reasonable.
Check if attorney’s fees and penalties are expressly stipulated and not unconscionable.

XIII. Key Takeaways

Unpaid private hospital bills in the Philippines are civil debts.
Non-payment alone does not lead to jail, but it can lead to:
- Civil suits
- Court judgments
- Garnishment or levy on assets
Hospitals cannot detain patients or cadavers purely for non-payment, but they can still sue.
Liability rests primarily on:
- The patient and anyone who signed as co-debtor/guarantor or “responsible party.”
Hospitals may use:
- Internal billing
- Collection agencies
- Small claims or ordinary civil actions
Debtors have:
- Rights against harassment
- Rights to accurate billing
- Possible defenses (billing errors, prescription, lack of consent/authorization, etc.)
Early, honest communication and negotiation with the hospital often prevents litigation.

For anyone facing actual unpaid private hospital bills, the specific facts – documents signed, amounts, dates, PhilHealth/HMO coverage, and communications with the hospital – matter a lot. Consulting a Philippine lawyer or legal aid group with your papers in hand is the safest way to get advice tailored to your situation.