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Health system sues thousands of patients, seizing paychecks and putting liens on homes

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…[ ]

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Posted by kenne20

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