‘UVA has ruined us’: Health system sues thousands of patients, seizing paychecks and putting liens on homes
By Jay Hancock and
Elizabeth Lucas, September 9
Heather Waldron and John Hawley are losing their four-bedroom house in the hills above Blacksburg, Va. A teenage daughter, one of their five children, sold her clothes for spending money. They worried about paying the electric bill. Financial disaster, they say, contributed to their divorce, finalized in April.
Their money problems began when the University of Virginia Health System pursued the couple with a lawsuit and a lien on their home to recoup $164,000 in charges for Waldron’s emergency surgery in 2017.
The family has lots of company: Over six years ending in June 2018, the health system and its doctors sued former patients more than 36,000 times for over $106 million, seizing wages and bank accounts, putting liens on property and homes and forcing families into bankruptcy, a Kaiser Health News analysis has found.
Unpaid medical bills are a leading cause of personal debt and bankruptcy, with hospitals from Memphis to Baltimore criticized for their role in pushing families over the financial edge. But UVA stands out for the scope of its collection efforts and how persistently it goes after payment, pursuing poor as well as middle-class patients for almost all they’re worth, according to court records, hospital documents and interviews with hospital officials and dozens of patients.
UVA sued patients for as little as $13.91 and as much as $1 million during most of that period, until July 2017, when it restricted lawsuits to those owing more than $1,000, the analysis shows.
Every year, the health system sued about 100 of its own employees who also happened to be patients. It garnished thousands of paychecks, largely from workers at lower-pay employers such as Walmart, where UVA took wages more than 800 times.
Under a Virginia program designed to help state and local governments collect debt, it also seized $22 million in state tax refunds to patients with outstanding medical bills in the last six fiscal years — most of it without court judgments, said health system spokesman Eric Swensen.
Over many years, it filed thousands of property liens from Albemarle County all the way to Georgia.
Beyond its recovery of debts, UVA dunned some former patients an additional 15 percent for legal costs, plus 6 percent interest on their unpaid bills, which over the course of years can add up to more than the original bill.
The health system also has the most restrictive eligibility guidelines for financial assistance to patients of any major hospital system in Virginia, interviews and written policies show. Savings of only $4,000 in a retirement account can disqualify a family from aid, even if its income is barely above poverty level.
The hospital ranked No. 1 in Virginia by U.S. News & World Report is taxpayer supported and state-funded, not a company with profit motives and shareholder demands. Like other nonprofit hospitals, it pays no federal, state or local taxes on the presumption it offers charity care and other community benefits valued at least as much as those breaks. Gov. Ralph Northam (D), a pediatric neurologist, oversees its board.
UVA officials defended the institution’s practices as legally required and necessary “to generate positive operating income” to invest in medical education, new facilities, research and the latest technology.
They point to the Virginia Debt Collection Act of 1988, which requires state agencies to “aggressively collect” money owed.
During the six-year period studied, UVA had an estimated six million visits and cared for those patients “regardless of their ability to pay,” said Swensen, the health system spokesman.
“For the vast majority of patients, we are able to agree upon workable payment plans without filing a legal claim,” he said. Suing patients or using collection agencies are “a last resort,” he added.
Before patients got court summons, they would have received “four to five” bills over several months, along with instructions about how to apply for financial assistance, Swensen said.
During the most recent fiscal year, which ended in June, he said, UVA approved almost 10,000 applications for assistance under charity care guidelines set by the state. Most of those patients paid nothing beyond a $6 co-pay.
In addition, UVA is undertaking “a comprehensive review” of its charity care rules and “considering policies to provide additional financial assistance to low-income patients,” he said.
Swensen declined to discuss the circumstances of individual patients, saying the hospital was bound by patient confidentiality. UVA Health CEO Pamela Sutton-Wallace declined an interview request. A spokeswoman for Northam did not respond to repeated requests for comment.
Though there is no national data on hospital debt collection, UVA’s pursuit of patients goes beyond that of a number of other institutions.
Johns Hopkins Hospital in Baltimore has sued roughly 240 patients a year on average since 2009, according to a May report in the Baltimore Sun. UVA, by comparison, often sues that many former patients in a week, and averages more than 6,000 cases a year, court data show.
Private, nonprofit Yale New Haven Health System files liens only if a bill is over $10,000, and then only if the property is worth at least $300,000, a spokesman said. Falls-Church, Va.-based Inova Health says it does not file liens on patient homes or garnish wages.
Tenet Healthcare, a national, for-profit chain whose stock trades on Wall Street, says it does not sue uninsured patients who are unemployed or who lack significant assets other than their house.
Industry standards are few and vague. The American Hospital Association says its members follow Internal Revenue Service guidelines, which merely require hospitals to have a financial assistance policy and to make “reasonable efforts” to determine whether a patient qualifies for help before initiating collections.
Patients find themselves unable to pay UVA bills for many reasons: They are uninsured or sometimes have short-term coverage that does not pay for treatment of preexisting illnesses. Or they are out of network, or have a “high-deductible” plan — increasingly common coverage nationwide that can require patients to pay more than $6,000 before insurance kicks in. Virginia’s Medicaid expansion, which took effect this year, covers families with low incomes but is still projected to leave hundreds of thousands uninsured.
Patients also have trouble because like many U.S. hospitals, UVA bills people lacking coverage at rates far higher than what insurance companies pay on behalf of their members. Such bills often have little connection to the cost of care, experts say. Insurers obtain huge discounts off hospital sticker prices — 70 percent on average in UVA’s case, according to documents it files with Medicare.
UVA offers uninsured patients 20 percent off to start and another 15 to 20 percent if they pay promptly, Swensen said. Few are able to do that. Patients are subject to collections and lawsuits if they do not pay, or arrange to do so, within four months, he said.
The $164,000 billed to Waldron for intestinal surgery was more than twice what a commercial insurer would have paid for her care, according to benefits firm WellRithms, which analyzed bills for Kaiser Health News using cost reports UVA files with the government. Charges on her bill included $2,000 for a $20 feeding tube.
UVA would not disclose basic information about patient lawsuits, liens and garnishments. Reporters reconstructed the hospital’s practices by talking directly with patients, analyzing court documents and hospital bills and observing the legal process in court. They gathered records in Charlottesville to supplement a courts database compiled by nonprofit Code for Hampton Roads, which works to improve government technology.
The picture that emerges is one of little accountability for UVA — or of redress for its patients.
Waldron, 38, an insurance agent and former nurse, appreciates the treatment she received for an intestinal malformation that almost killed her. But, she says, “UVA has ruined us.”
By Jay Hancock and
Elizabeth Lucas, September 9
Heather Waldron and John Hawley are losing their four-bedroom house in the hills above Blacksburg, Va. A teenage daughter, one of their five children, sold her clothes for spending money. They worried about paying the electric bill. Financial disaster, they say, contributed to their divorce, finalized in April.
Their money problems began when the University of Virginia Health System pursued the couple with a lawsuit and a lien on their home to recoup $164,000 in charges for Waldron’s emergency surgery in 2017.
The family has lots of company: Over six years ending in June 2018, the health system and its doctors sued former patients more than 36,000 times for over $106 million, seizing wages and bank accounts, putting liens on property and homes and forcing families into bankruptcy, a Kaiser Health News analysis has found.
Unpaid medical bills are a leading cause of personal debt and bankruptcy, with hospitals from Memphis to Baltimore criticized for their role in pushing families over the financial edge. But UVA stands out for the scope of its collection efforts and how persistently it goes after payment, pursuing poor as well as middle-class patients for almost all they’re worth, according to court records, hospital documents and interviews with hospital officials and dozens of patients.
UVA sued patients for as little as $13.91 and as much as $1 million during most of that period, until July 2017, when it restricted lawsuits to those owing more than $1,000, the analysis shows.
Every year, the health system sued about 100 of its own employees who also happened to be patients. It garnished thousands of paychecks, largely from workers at lower-pay employers such as Walmart, where UVA took wages more than 800 times.
Under a Virginia program designed to help state and local governments collect debt, it also seized $22 million in state tax refunds to patients with outstanding medical bills in the last six fiscal years — most of it without court judgments, said health system spokesman Eric Swensen.
Over many years, it filed thousands of property liens from Albemarle County all the way to Georgia.
Beyond its recovery of debts, UVA dunned some former patients an additional 15 percent for legal costs, plus 6 percent interest on their unpaid bills, which over the course of years can add up to more than the original bill.
The health system also has the most restrictive eligibility guidelines for financial assistance to patients of any major hospital system in Virginia, interviews and written policies show. Savings of only $4,000 in a retirement account can disqualify a family from aid, even if its income is barely above poverty level.
The hospital ranked No. 1 in Virginia by U.S. News & World Report is taxpayer supported and state-funded, not a company with profit motives and shareholder demands. Like other nonprofit hospitals, it pays no federal, state or local taxes on the presumption it offers charity care and other community benefits valued at least as much as those breaks. Gov. Ralph Northam (D), a pediatric neurologist, oversees its board.
UVA officials defended the institution’s practices as legally required and necessary “to generate positive operating income” to invest in medical education, new facilities, research and the latest technology.
They point to the Virginia Debt Collection Act of 1988, which requires state agencies to “aggressively collect” money owed.
During the six-year period studied, UVA had an estimated six million visits and cared for those patients “regardless of their ability to pay,” said Swensen, the health system spokesman.
“For the vast majority of patients, we are able to agree upon workable payment plans without filing a legal claim,” he said. Suing patients or using collection agencies are “a last resort,” he added.
Before patients got court summons, they would have received “four to five” bills over several months, along with instructions about how to apply for financial assistance, Swensen said.
During the most recent fiscal year, which ended in June, he said, UVA approved almost 10,000 applications for assistance under charity care guidelines set by the state. Most of those patients paid nothing beyond a $6 co-pay.
In addition, UVA is undertaking “a comprehensive review” of its charity care rules and “considering policies to provide additional financial assistance to low-income patients,” he said.
Swensen declined to discuss the circumstances of individual patients, saying the hospital was bound by patient confidentiality. UVA Health CEO Pamela Sutton-Wallace declined an interview request. A spokeswoman for Northam did not respond to repeated requests for comment.
Though there is no national data on hospital debt collection, UVA’s pursuit of patients goes beyond that of a number of other institutions.
Johns Hopkins Hospital in Baltimore has sued roughly 240 patients a year on average since 2009, according to a May report in the Baltimore Sun. UVA, by comparison, often sues that many former patients in a week, and averages more than 6,000 cases a year, court data show.
Private, nonprofit Yale New Haven Health System files liens only if a bill is over $10,000, and then only if the property is worth at least $300,000, a spokesman said. Falls-Church, Va.-based Inova Health says it does not file liens on patient homes or garnish wages.
Tenet Healthcare, a national, for-profit chain whose stock trades on Wall Street, says it does not sue uninsured patients who are unemployed or who lack significant assets other than their house.
Industry standards are few and vague. The American Hospital Association says its members follow Internal Revenue Service guidelines, which merely require hospitals to have a financial assistance policy and to make “reasonable efforts” to determine whether a patient qualifies for help before initiating collections.
Patients find themselves unable to pay UVA bills for many reasons: They are uninsured or sometimes have short-term coverage that does not pay for treatment of preexisting illnesses. Or they are out of network, or have a “high-deductible” plan — increasingly common coverage nationwide that can require patients to pay more than $6,000 before insurance kicks in. Virginia’s Medicaid expansion, which took effect this year, covers families with low incomes but is still projected to leave hundreds of thousands uninsured.
Patients also have trouble because like many U.S. hospitals, UVA bills people lacking coverage at rates far higher than what insurance companies pay on behalf of their members. Such bills often have little connection to the cost of care, experts say. Insurers obtain huge discounts off hospital sticker prices — 70 percent on average in UVA’s case, according to documents it files with Medicare.
UVA offers uninsured patients 20 percent off to start and another 15 to 20 percent if they pay promptly, Swensen said. Few are able to do that. Patients are subject to collections and lawsuits if they do not pay, or arrange to do so, within four months, he said.
The $164,000 billed to Waldron for intestinal surgery was more than twice what a commercial insurer would have paid for her care, according to benefits firm WellRithms, which analyzed bills for Kaiser Health News using cost reports UVA files with the government. Charges on her bill included $2,000 for a $20 feeding tube.
UVA would not disclose basic information about patient lawsuits, liens and garnishments. Reporters reconstructed the hospital’s practices by talking directly with patients, analyzing court documents and hospital bills and observing the legal process in court. They gathered records in Charlottesville to supplement a courts database compiled by nonprofit Code for Hampton Roads, which works to improve government technology.
The picture that emerges is one of little accountability for UVA — or of redress for its patients.
Waldron, 38, an insurance agent and former nurse, appreciates the treatment she received for an intestinal malformation that almost killed her. But, she says, “UVA has ruined us.”