UVA health system will curb decades of hounding patients over medical bills

uvahealth-300x200The University of Virginia health system has decided to end decades of draconian bill collection, giving a reprieve to tens of thousands of patients and their families who faced harsh legal actions to recover crushing medical debt.

The taxpayer-supported institution proclaimed itself “proud” that it will stop aggressively suing its own employees, university students, and hard-working and poor Virginians after they experienced illness and injury serious enough to require hospitalization.

The university jammed the state courts with these actions, as well as liens against properties — including those of family members and not just patients themselves. The process to clear the debt-collection backlog may take a year or more. The health system “will release all liens and judgments filed against all households making less than 400% of the federal poverty level, or about $106,000 for a family of four,” the Washington Post reported.

The health system’s rollback resulted from its deserved embarrassment due to investigations by the nonpartisan, independent Kaiser Health News service, which found:

“KHN reported in 2019 that UVA Health had sued patients 36,000 times over six years for more than $100 million, often for amounts far higher than what an insurer would have paid for their care. In response to the articles, the system suspended lawsuits against patients and wage garnishments, increased discounts for the uninsured and broadened financial assistance, including for cases dating to 2017.”

KHN reporters kept digging at UVA Health’s practices, finding that the health system also pursued unpaid bills with unusual zeal, placing liens against property owned by patients and family members:

“Nobody knows how many old or new UVA Health liens are scattered through scores of Virginia courthouses. The health system, which has sued patients in almost every county and city in the state, has failed to respond to repeated requests over two years to disclose the number and value of its property liens. But in Albemarle County alone, which surrounds the university’s Charlottesville home, ‘there are thousands’ of UVA Health judgments filed in the land records, which creates a lien, said Circuit Court Clerk Jon Zug. Not just Virginia homes are at risk. UVA Health lawyers search the nation for property or other assets owned by patients with outstanding bills and have filed liens in Maryland, West Virginia, Ohio and Florida, court records show … Virginia property liens expire after 20 years. But UVA Health often renews them. Since 2017, just in Albemarle County, it has renewed more than three dozen liens. That means the medical system could seize families’ home equity until 2039 for bills dating to the last century. UVA Health and other medical systems rarely force the sale of a home to claim money. Instead, they wait for families to refinance or sell, taking their cut at the settlement table. But with 6% simple interest accumulating year after year after the court judgment, as allowed by Virginia law, the final amount owed can be much more than the original charges.”

Besides mounting interest charges, the health system also ripped patients with high charges and little charitable relief. Many of those with big bills had the misfortune to be uninsured, meaning the university hit them with its highest rates for all aspects of their treatment. Reporters found that the health system — which reaps huge tax benefits as a nonprofit, purportedly assisting the poor and working poor — lagged in assisting those in need.

In case the fiscally conscious may be wondering, the health system long insisted that it was required under state law to pursue sums owed to Virginia with vigor. Still, consider that the already announced steps by the health system to cancel zealous debt collection and improve aid to those in need were estimated to cost UVA roughly $12 million. How does that figure in the finances of the commonwealth’s top-rated medical institution? KHN earlier reported this:

“UVA Medical Center, the flagship of UVA Health System, earned $554 million in profit over the six years ending in June 2018 and holds stocks, bonds and other investments worth $1 billion, according to financial statements. CEO Sutton-Wallace earns a salary of $750,000, with bonus incentives that could push her annual pay close to $1 million, according to a copy of her employment contract, obtained under public information law.”

The health system, like all other caregiving institutions nationwide, struggled through the coronavirus pandemic, which added costs and reduced revenues. Still, the latest dollars and cents report from the system suggests it is far from hurting, according to a Charlottesville newspaper:

“Information presented to the [health system’s] board showed that the Medical Center had nearly 500 fewer employees [mostly traveling nurses] during the past six months … Those lapsed salaries, and an increase of patients whose bills were paid, helped the hospital to overcome higher Covid-related costs and fewer patients and turn in a positive financial operating margin for the first part of the system’s current fiscal year. According to information presented to the board, operating income hit $24.6 million. After expenses and fund transfers, that amounts to a 2.7% operating margin, the documents show.”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent health care. This has become an ordeal due to the skyrocketing cost, complexity, and uncertainty of treatments and prescription medications, too many of which turn out to be dangerous drugs.

As patient advocates look to ways to slash at bankrupting health care costs, they have put hospitals squarely in their sights, as these institutions have become a major driver of spending, taking up roughly 1 of every 3 dollars spent in this area (~$1.2 trillion in 2018 alone).

Sure, hospitals and the people in them need to make a reasonable return. But grinding down patients and their families by grubbing mercilessly for every penny is a poor way for any enterprise to treat its customers. And too many folks in establishment medicine devote their best efforts these days not to caring for others but billing them and chasing them as hard as they can. As the Washington Post also reported:

“UVA’s decision to substantially reduce lawsuits and erase liens stops short of moves recently made by VCU Health, its sister system based at Virginia Commonwealth University. VCU pledged to stop suing all patients and, in a process taking more than a year in courthouses across Virginia, is abolishing all old judgments and liens regardless of a family’s income … VCU eventually found about 80,000 [liens] statewide.”

Patients can and should fight back against unreasonable hospital costs. We have lots of work to do, however, to ensure that all health care bills are reasonable and that the abomination of excess medical debt and the overzealous attempts to collect it go away, pronto. In the wealthiest nation in the world, health care must be a right and not a privilege reserved only for the rich.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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