UVa Medical Center

DAILY PROGRESS FILE

The University of Virginia has claimed it is legally obliged under state provisions to use “aggressive” methods to collect medical debt. Various experts have taken issue with this claim, pointing to a subsequent provision that clarifies the collection methods should be “reasonable.”

The University of Virginia Medical Center announced Friday morning that it will adjust its financial aid guidelines in order to offer free and low-cost care to more patients.

The announcement came after pressure from a report that revealed how frequently the hospital had sued patients in recent years. Beginning in January, the university will write off more bills of low-income patients, and it will offer uninsured patients a larger discount if they meet new asset requirements, according to a statement. It has not yet, however, addressed whether it will add additional assistance for the unemployed or its own staff or students.

“The reality is our practices were too aggressive,” said President Jim Ryan. “We do accept all patients, but there’s a balance there in how you do it. It’s not an easy balance to get right, but I think we’re moving toward a better place.”

In a statement, the university said it recognized that “lawsuits, property liens and garnishing wages can be not only disruptive but devastating.” It said that, moving forward, the university will typically refrain from filing suit unless patients have outstanding balances over $1,000 and are part of households earning more than 400% of the federal poverty level, which is $103,000 for a family of four.

Doug Lischke, the hospital’s chief financial officer, said the hospital has considered adjusting its guidelines before, but first seriously started investigating the possibility after receiving inquiries from reporters.

On Monday, Kaiser Health News published a report that revealed the health system and its doctors had sued former patients more than 36,000 times for over $106 million from 2013 to June 2018, seizing wages and bank accounts, putting liens on property and homes and forcing families into bankruptcy.

The new financial assistance guidelines represent a first step, according to the university, which also plans to form a working group to address the issue, improve its price transparency tools and address specific concerns of UVa students and staff who have had wages garnished or enrollments put on hold due to medical bills.

“This is here to stay,” Lischke said Friday during an interview also attended by a hospital spokesman. “And we’re hoping to lead the way in how we put in systems and processes that are deemed fair and equitable.”

Currently, UVa writes off the bills of only a small fraction of patients who are at or below the federal poverty level and who have less than $3,200 in assets. An individual making less than $12,500 or a family of four making less than $25,750 are considered to be living in poverty, according to federal guidelines. UVa’s current asset test asks patients to list retirement, savings and investment accounts; it excludes a home, a car and up to 3.99 acres of land.

Those eligibility guidelines were the most restrictive in the state, according to the Kaiser investigation, and meant low-income families with as little as $4,000 in a savings account were dunned for outstanding medical bills, as well as court fees and lawyer fees.

In addition to the new lawsuit threshold, UVa announced a new sliding scale for which patients are eligible for financial assistance:

» Beginning Jan. 1, patients at or below the federal poverty level who have less than $50,000 in assets will have their bills written off entirely.

» Beginning Jan. 1, patients between 101-200% of the federal poverty line who have less than $50,000 in assets will also have their bills written off entirely.

» For patients between 201-300% of the federal poverty line, UVa currently writes off 20% of charges if patients are not insured. Beginning Jan. 1, the hospital will write off 60% of the charges for those within this income bracket who have less than $50,000 in assets and are uninsured.

» For those between 301-400% of the federal poverty line, UVa currently writes off 20% of charges if patients are not insured. Beginning Jan. 1, the hospital will write off 50% of the charges for those within this income bracket who have less than $50,000 in assets and are uninsured.

» For those who are not insured and who are over 400% of the federal poverty line, the hospital currently writes off 20% of their charges. Beginning Jan. 1, UVa will write off 40% of their charges.

» For those below 400% of the poverty line but with assets over $50,000, UVa will write off 40% of their charges.

People who do have insurance but have high-deductible plans will also be offered assistance with their out-of-pocket costs, depending on their income and assets.

The changes came after days of quiet from university officials, other than social media statements by Ryan and the medical center. On Friday, the hospital invited its employees to two town halls but did not allow Progress staff to attend, saying the meetings were private.

Experts have called for the university to also use more transparency in pricing and billing. At UVa, as at most hospitals, the uninsured are charged a sticker price, also called the chargemaster price. Most insurers negotiate prices for procedures that are significantly cheaper than the sticker price, and Medicare and Medicaid typically pay lower still. And despite recent policy changes that require hospitals to post their chargemasters, and UVa’s tool to request prices for procedures, it can still be difficult for patients to have any idea what they might pay for a given procedure.

On Friday, Pamela Sutton-Wallace, the outgoing CEO of the medical center, said the hospital was reviewing how it charged for procedures but that any adjustments to prices for one group of patients would also likely require adjustments for other groups and would only occur as part of a broader process.

The changes also do not offer any additional assistance for the unemployed, or for UVa staff who have had wages garnished, or for the 17 students that UVa said on Tuesday had enrollment holds placed on their accounts, changes that would be in line with measures other not-for-profit hospitals have recently taken, according to the Kaiser investigation.

Ryan said he thought the university needed to look at whether the hospital could offer additional relief to staff and students, but he wasn’t yet clear on the legal options available.

“A lot of these situations are very different, patient to patient, and what we’re doing right now is trying to commit to something that can begin to help,” he said.

Patients who must pay bills before Jan. 1 are encouraged to call (434) 980-6110 beginning on Monday for potential assistance, according to the university.

The university did not make a statement about ongoing court cases in the Albemarle General District Court; on Thursday, university lawyers dropped 14 warrant in debt suits, but according to online court records, nearly 300 remain on the docket later this month.

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