Editor's note: This is one in a series of cases Patients Rising has documented as part of Medical Bankruptcy in America — a six-state review of approximately 900 federal bankruptcy filings and the role of 340B-participating hospitals as creditors. Identifying details about individuals have been removed to protect privacy; the financial information referenced is documented in public federal court filings. The full Colorado analysis will publish later in the series. Methodology available on request.

They filed Chapter 7 together in a federal bankruptcy court in Louisiana.

A married couple. One income. Five grandchildren living in the home.

The largest single creditor on their schedule, however, is not a Louisiana institution. It is a hospital in northern Colorado, where they previously lived: UCHealth Medical Center of the Rockies, a Loveland-area 340B-participating nonprofit hospital that is part of the UCHealth system.

The balance: $107,571.09.

That is the largest unsecured claim in their bankruptcy. Their total liabilities exceed half a million dollars and include car loans, personal loans, and a mortgage. But one line stands above the rest — a six-figure hospital bill from a federally subsidized 340B-participating institution, accumulated before a move that took the household to a different state without leaving the debt behind.

Medical debt is portable. A patient who incurs a six-figure balance at a 340B hospital and then moves takes the balance with them. The hospital's federal-program participation is tied to the community it serves; the patient who has left that community still owes the bill.

The scale of the medical debt

Their current gross monthly wages are just over $5,500.

After deductions, their take-home pay is approximately $4,742 per month.

Their monthly household expenses total $4,742.

There is no margin. No reserve. No excess capacity to absorb unexpected cost.

A six-figure hospital bill in a household operating at zero monthly surplus is not a temporary hardship. It is a structural impossibility. $107,571 is more than double their annual take-home pay. It is not a balance that can be "worked out" over time without dismantling the household entirely.

The hospital knew this. The collections agency knew it. The household knew it. The bankruptcy was inevitable from the moment the first billing notice arrived.

What 340B is supposed to do

The 340B Drug Pricing Program, created by Congress in 1992, allows participating hospitals to purchase outpatient drugs at substantially discounted prices — typically 25 to 50 percent below wholesale. In 2024, the most recent year for which the Health Resources and Services Administration has released data, 340B-covered entities purchased $81.4 billion in discounted drugs nationally; hospitals accounted for $71 billion of that.

The purpose of the program, as Congress wrote it, was to strengthen hospital capacity to serve vulnerable patients. UCHealth Medical Center of the Rockies participates. So does every major UCHealth facility across the Colorado Front Range.

What the program does not require — at any participating hospital, in Colorado or anywhere else — is that the drug-pricing savings result in lower bills for patients like the one on this schedule. The savings flow into the hospital's pharmacy budget. The patient's bill is the patient's bill.

What the family was not told

There is no federal statutory definition of a "340B patient." The 340B statute, written in 1992, never defined the term. HRSA's 1996 guidance attempting a definition was struck down in Genesis Healthcare v. Becerra in November 2023. In current practice, UCHealth and every other 340B-participating hospital can classify a patient as 340B-eligible after the fact — combing records days or weeks after care to maximize program revenue. The patient is never informed.

There is no federal statutory definition of "charity care." UCHealth's published charity-care policy is a different document than the next Colorado hospital's, with different eligibility thresholds and different application requirements. Two patients with identical financial circumstances can qualify for charity-care write-offs at one hospital and not the other, and neither hospital is doing anything wrong under federal law.

There is no federal requirement that any 340B-participating hospital tell a patient at the point of care that the hospital is a 340B participant. There is no federal requirement to disclose what charity-care policy applies, what the eligibility threshold is, or how to apply.

The family on this schedule may have been eligible for charity-care relief at UCHealth. By their current monthly income, they almost certainly were. They were not told. The bill came. Then the collections letters. Then the move. Then the bankruptcy.

What "community benefit" includes

UCHealth, like every nonprofit hospital system on the bankruptcy schedules in our six-state series, reports annual "community benefit" expenditures on IRS Form 990 Schedule H. The American Hospital Association aggregates those reports into the figure it cites every time the 340B program is questioned: nearly $100 billion in 340B-hospital community benefits in 2023.

That figure is assembled by the trade association of the same hospitals being scrutinized, from data those hospitals self-report under federal definitions that do not exist. The category includes financial assistance, unreimbursed Medicaid, research, the Medicare shortfall, "community-building activities," and bad debt — the last of which includes patient bankruptcy write-offs.

When this household's Chapter 7 discharge enters, the $107,571 balance to UCHealth Medical Center of the Rockies will become uncollectable as a matter of federal law. UCHealth will write it off. Under federal hospital-reporting conventions, the write-off may be aggregated into UCHealth's annual "community benefit" disclosure.

The same bankruptcy UCHealth helped create becomes part of UCHealth's reported community contribution.

What the schedule shows

Medical debt is not elective. It is not discretionary consumption. It is incurred in moments of vulnerability — often by households with no capacity to anticipate or absorb it.

When the largest unsecured creditor in a bankruptcy case is a 340B-participating hospital, the gap between the program's purpose and the program's patient-side reality becomes unavoidable.

The federal government created 340B to strengthen care for patients under financial strain. This is one schedule, from one household, naming a 340B hospital as the dominant unsecured claim in a family's financial collapse.

Across the six states in our series, the same pattern recurs:

Working households. Zero monthly margin. Large hospital claims. 340B participation. Chapter 7.

The hospital will write the balance off.

The family had to file bankruptcy to get there.

The schedules are in the federal court file. The file is public.

We have read it.

Methodology and aggregate data tables available on request.