The University of Virginia Medical Center is reviewing its policy of frequently suing and garnishing wages of patients who have not paid their medical bills.
A little over a month ago, University President Jim Ryan learned about the extent to which UVa sues to receive medical bills, according to a statement posted Monday evening on social media. He said he asked the CEO of the medical center, Pamela Sutton-Wallace, to change the aggressive practices, and that she agreed to do so.
“It is complicated, for a number of reasons, including the fact that we are legally obligated as a state agency to collect debts,” Ryan wrote. “But we have discretion within those legal constraints to make our system more generous and more humane, and that is what we will do. Pam and her team are finalizing the proposed changes, and we expect to announce them by the end of this week.”
A spokesman for the hospital confirmed Tuesday that the review was prompted by a scathing report by Kaiser Health News, which was published Monday in The Washington Post. According to the investigation, the health system and its doctors 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.
“I know I am not the only person in this predicament,” said Yvonne Beverly, a Monroe resident who is currently being sued over $6,222 in outstanding medical bills for her late husband’s acute myeloid leukemia treatment, according to a July warrant in debt. Her wages from her nursing job have already been garnished twice, according to court records. On Sept. 5, she got another notice from UVa warning about an outstanding balance of $7,846; she will return to Albemarle General District Court in October as UVa attempts to garnish her wages again.
“I feel like this is a punishment for loving my husband to the end,” she said. “But I held his hand as he died, and I don’t regret one minute of it.”
UVa declined to make Sutton-Wallace available for an interview about how these aggressive policies developed. The university announced Tuesday that she will leave her position in November in order to take a senior role at New York-Presbyterian Hospital, a departure which Ryan wrote in a statement was unrelated to the Kaiser Health News investigation.
Hospitals across the country have been criticized for tactics used to recoup their costs, according to previous media reports. Medical bills are a leading cause of bankruptcy, according to several high-profile studies, though some researchers have disputed the degree to which hospital costs contribute to bankruptcy filings.
Nonprofit hospitals—which receive significant tax breaks because of their not-for-profit status— are more likely than for-profit hospitals to garnish the wages of patients, according to a June study of Virginia hospitals published in the Journal of the American Medical Association.
According to Marty Makary, a professor of surgery at Johns Hopkins University and an author of the study, a small number of Virginia hospitals accounted for the majority of suits filed in 2017. Food service, hospital workers and retail workers are the most likely patients to be sued for unpaid medical care, he said. And while the paper does not identify specific hospitals, Makary said his team reviewed cases filed in Albemarle County and saw that UVa was a leading filer of lawsuits.
“The doors of the hospital are open with a statement of admission and then patients are traumatized with a bill they cannot afford to pay,” Makary said in an interview in August.
According to a 2018 analysis by The Virginia Mercury, the UVa Health System and Sentara Healthcare, which owns the Sentara Martha Jefferson Hospital, are leading filers of medical debt lawsuits in the state.
“There are lots of people who have insurance but bad policies, and so they get stuck with $40,000, $50,000 and $60,000 in debt,” said Bob Stevens, a Charlottesville lawyer who handles bankruptcy cases, many of which are prompted by UVa debts, he said.
Each month, Albemarle County courts handle stacks of warrants in debt and garnishment cases brought by UVa. On a recent day in August, a judge flipped through the files of 121 people being sued by UVa for outstanding debts, calling out their names one by one to see if UVa staff members from the collections department had resolved the cases. If patients don’t arrive before the docket call to discuss a payment plan with the staff, the case is often referred for garnishment.
Marshall Slayton, another bankruptcy attorney who works in Charlottesville and Culpeper, said UVa employs several billing strategies that Slayton said often impact patients’ abilities to retain their assets when faced with expensive medical fees. In order to apply for financial assistance, UVa patients must first fill out a screening form that asks them to list their assets, which Slayton says simply allows the billing office to see if a patient has a house or a retirement account that could become collateral for debts.
In order to become more equitable and fairer to patients, Slayton said he would like to see UVa provide payment plans with higher income threshholds — UVa’s is 200% of the federal poverty level — improve the financial screening process and streamline the billing process so patients aren’t juggling bills from the UVa Medical Center, University Physicians Group, UVa Pharmacy and UVa Imaging.
But changes to collections processes may not impact the fees charged for emergency care and chronic conditions, which can be billed at varying rates depending on hospital and insurer and can be tough for individuals to understand and negotiate.
UVa sued Rick Morris, an Earlysville resident, earlier this year, for unpaid medical bills, but the case was dismissed. Morris is now suing UVa for what he says are unfair business practices, claiming that the hospital charged him, his wife and his son one rate for rabies shots, while his daughters, who sought treatment for rabies in Wytheville, were charged a much lower price at a community hospital. The case is currently set for trial in January.
According to law, UVa cannot turn away patients, which means it often takes care of the sickest and poorest patients. It does frequently give patients charity care; in the most recent fiscal year, which ended in June, spokesman Eric Swensen said UVa approved almost 10,000 applications for assistance. Many patients paid nothing beyond a $6 copay.
However, its financial assistance policy is more limited than others in the state, according to the Kaiser investigation. To get assistance, UVa patients must earn less than 200% of federal poverty guidelines and own less than about $3,000 in assets, not counting a house. Real estate or investment incomes can disqualify a patient from assistance.
Medical bills can also have long-lasting impacts on someone’s life. After inquiries by The Daily Progress, patients reported high interest rates for payments, confiscated tax payments and the need for second jobs in order to pay for care. Some have been forced into bankruptcy, according to a review of federal court filings. Several university employees have resorted to GoFundMe campaigns in order to pay outstanding fees and stave off wage garnishment.
Outstanding fees can also affect university students’ classes, as Ariel Harris found out.
In March, Harris, then in her third year at UVa, was in a car crash and went to the UVa Medical Center. The bills should have been covered by the other driver’s insurance, she said, but the insurance payments lagged and UVa threatened to cancel her enrollment in August if she did not pay the $7,000 still outstanding, according to notifications reviewed by The Daily Progress in August. The warning was the first time Harris had heard of a policy that made enrollment contingent on resolving hospital bills.
“My time in this hospital has by far been the worst of any health care system I’ve ever been a part of,” said Harris, who was forced to temporarily drop her classes, hire a lawyer and spend hours on the phone with UVa staff members in order to resolve the situation.
Two weeks after her enrollment in fall classes was put on hold, Harris was able to re-enroll, but only after paying $2,000 to pay the hold — money she still believes she should not owe and hopes to eventually recoup.
“There has to be some sort of division between the health care side [of UVa] and the university,” she said. “It should not be able to impede your education; if I had happened to go to Martha Jefferson [Hospital] or somewhere in Richmond, I would not have faced these consequences.”
There are currently 17 students enrolled on medical center holds, according to university spokesman Wes Hester, which means they will not be able to enroll in spring classes if they still have bills outstanding. Hester said no student’s enrollments have been canceled due to the holds and that the policy is seen as an alternative to sending a student’s bill to debt collections.
Hester said the university is reviewing the enrollment holds policy as part of its larger review of billing practices.
In Virginia and across the country, legislators and industry executives are wrangling about better ways to control health care costs so that patients are hopefully stuck with more manageable bills.
Sen. Tim Kaine, D-Va., after learning of the Kaiser Health News report on Monday, said he believed balanced billing legislation could resolve core problems of pricing in health care. A bipartisan group of federal lawmakers have been working on the issue, which aims to force health care providers avoid charging patients for receiving care from out-of-network practitioners at facilities that are part of their insurance network.
“We have a strong bill out of the [Health, Education, Labor and Pensions] Committee on the floor of the Senate that would completely eliminate any obligation of patients to pay surprise bills that show up late,” Kaine said after a post office dedication ceremony in Charlottesville on Monday. “I haven’t read the Kaiser study, but if we do what we should do and eliminate surprise bills, that should reduce these garnishment suits significantly.”
UVa is expected to announce changes to its billing and collections policy on Friday, according to spokesmen.