UVA Health System, which sues thousands of patients each year, seizing wages and home equity to collect on overdue medical bills, said Friday it would increase financial assistance, give bigger discounts to the uninsured and “reduce our reliance on the legal system.”
“This will have a huge impact on patients to the good,” Doug Lischke, the health system’s chief financial officer, said in an interview. The changes will “positively, drastically reduce the legal process” of lawsuits, garnishments and property liens.
“We believe this is much more generous than what we’re doing now.”
Lischke called the new policy “a first step” that could later include financial assistance beyond what was announced Friday. UVA also plans to ask the Virginia General Assembly to change a state law requiring state agencies, including health systems, to “aggressively collect” unpaid bills and charge 6% interest on the balance, he said.
But independent experts said the new UVA policy, which comes on the heels of a Kaiser Health News investigation detailing UVA’s aggressive collection practices, still leaves numerous patients exposed to lawsuits and crippling bills. KHN found that UVA sued patients more than 36,000 times over six years for more than $106 million, sending many families into bankruptcy. And it routinely billed uninsured patients for far more than what a typical insurance company would have paid.
By leaving family assets vulnerable and not fully discounting sticker-price charges, the new UVA guidelines remain “very tough on the poor and near-poor who have managed to amass anything of value that will help them with the daily costs of life,” said Sara Rosenbaum, a health policy professor at George Washington University.
The amended policy loosens qualifications for financial assistance, awarding aid to families with income of up to 400% of the federal poverty level, or $103,000 for a family of four. Until now, families making more than half that much were ineligible for assistance — the most restrictive rules of any major hospital system in Virginia, KHN found. Except in “unusual circumstances,” UVA won’t sue patients unless balances are more than $1,000 and families make more than 400% of the poverty guidelines, the health system said in a written statement.
“While these changes represent a step in the right direction, it’s unfortunate that UVA, a public institution, insists on still suing patients,” said Dr. Marty Makary, a surgeon and researcher at Johns Hopkins Medicine who studies hospital debt collection. “In my conversations with UVA surgeons, they are appalled by the practice of their center in suing patients and want it to stop.”
The changes take effect Jan. 1 but a UVA statement said the health system is “committed to working with anyone who currently has an outstanding balance or debt that they are struggling to pay.”
UVA has not decided what to do about patient lawsuits in the pipeline, Lischke said. Online court records show there are hearings scheduled for hundreds of UVA Medical Center cases over the next few weeks.
Mary Washington Healthcare of Fredericksburg, criticized earlier this summer for a far smaller number of lawsuits, said it would suspend suing patients and try to eliminate current garnishments. Methodist Le Bonheur Healthcare in Memphis, another on a growing list of hospitals called out for aggressive collections, said it would suspend all court activity for a month.
UVA will apply the new financial assistance and charging policies to patients treated in July 2017 or later, Lischke said. That means patients on current payment plans or with judgments against them could have bills eliminated or adjusted. But there will be no refunds of payments already made, he said.
The policies also apply to patients treated after July 2017 with judgments against them but no payment plan, he said. But there will be no refunds of payments already made, he said.
Taken together the changes will cost UVA “millions to tens of millions,” he said declining to give a more precise figure.
UVA began revising its billing and collections policies after being informed of KHN’s findings in August. It examined policies of neighboring hospitals such as Mary Washington as well as other major academic medical centers, Lischke said.
Previously just $4,000 in a retirement account could bar UVA patients from financial help, no matter how low their income. Now patients can have at least $50,000 in savings beyond the value of their home and car and still get assistance as long as they meet the income test, UVA said.
The nonprofit health system, a taxpayer-supported state agency, also said it would grant discounts of 40% to the uninsured to better reflect lower rates negotiated and paid by insurance companies. Previously, uninsured patients got only 20% off the sticker price plus another 10% to 15% if they paid promptly, which few could.
Shaving 40% from “chargemaster” prices used as a starting point for insurer negotiations puts bills to the uninsured in line with what a commercial health plan would pay, Lischke said.
That’s not enough, Rosenbaum said. She recommended they be lowered further to Medicare levels, which can be 75% off or more. The total of UVA’s cash revenue from all health plans and government programs is 70% below chargemaster, financial forms filed with the Department of Health and Human Services show.
“Even a 40% write-off of charges remains a brutal exposure” for the uninsured, she said. “How could they possibly remain tied to their chargemaster and keep a straight face?”
As part of its ongoing review of billing and collections, UVA will consider further lowering charges to the uninsured — perhaps to Medicare levels, Lischke said.
The new policy also does nothing for those who were sued and garnished for treatment before July 2017.
So far the health system’s announcement doesn’t help the 20 UVA students reported by KHN to have “active holds” on their enrollment this semester because they owe money to the UVA Medical Center. UVA treats unpaid hospital bills the same as unpaid tuition.
UVA has not approached legislators yet about changing billing laws but hoped to have next year’s General Assembly consider it.
“I am hopeful that we are able to influence a change to not only the Debt Collection Act” requiring aggressive collection “but also the state indigent care guidelines,” Lischke said.
Gov. Ralph Northam, a physician who is close to Dr. L.D. Britt, a Norfolk surgeon and professor who is chairman of the health system’s board, has said nothing publicly beyond his Monday statement that “I am glad to hear the UVA Health System is in the process of changing their policies and practices.”
CHARLOTTESVILLE, Va. — Under pressure after Kaiser Health News reported Monday that it sues thousands of patients a year and sends many into bankruptcy, University of Virginia Health System suspended about a dozen patient lawsuits Thursday and said it will announce changes to its billing and collections policy Friday.
At a weekly session at the Albemarle County Courthouse often dominated by UVA hospital litigation, UVA lawyer Melissa Riley said cases due to be heard Thursday would be withdrawn while the system takes a broader look at its long-standing practice of aggressive debt collection.
The move affects only those cases and changes nothing for thousands of patients who have already lost court judgments to UVA or face other pending lawsuits. And those cases could be refiled later.
“The university is conducting a review and may announce changes to its policies tomorrow,” Riley said.
Several patients in the courtroom and District Court Judge William Barkley said they had no comment.
UVA sued more than 36,000 patients over six years for unpaid bills for more than $106 million, KHN found.
It also seized some $22 million in patients’ state tax refunds, mostly outside the judicial process, as part of a program to help state and local governments collect debts. And it frequently billed uninsured patients for far more than what a typical insurance company would have paid.
Top officials at the health system’s quarterly board meeting Thursday morning were set to discuss billing and collections in a closed session but had little to say about the matters beforehand.
“I’m very concerned” about what KHN reported “and I’m very sympathetic” to patients caught in litigation, said James Murray, a venture capitalist who as rector serves as the head of the UVA Board of Visitors, its governing body.
As usual, the board met in UVA’s classical Rotunda, designed by Thomas Jefferson. UVA is taxpayer- and state-funded. A KHN reporter objected to the closed session, arguing that matters potentially affecting hundreds of thousands of UVA patients should be discussed publicly.
“We’re not going to discuss it in open session,” said Pamela Sutton-Wallace, the UVA Medical Center CEO who will step down in November, the university disclosed Tuesday.
Instead the board, led by L.D. Britt, a surgeon and professor at Eastern Virginia Medical School in Norfolk, celebrated a profitable fiscal year and UVA Medical Center ranking again as U.S. News & World Report’s top hospital in Virginia.
Unaudited results presented Thursday showed UVA Medical Center, the core of UVA Health, made an $87 million operating profit on revenue of $1.7 billion in the fiscal year ending in June and held stocks, bonds and other investments worth about $1 billion.
As part of its investigation into billing practices, KHN reported that UVA has the least generous patient financial assistance guidelines of any major hospital system in Virginia. Savings of only a few thousand dollars in a 401(k) account can disqualify even families with very low incomes from UVA aid.
CEO Sutton-Wallace is moving to New York-Presbyterian Hospital in November to become a senior vice president, UVA Health announced Tuesday. Her departure “is in no way related” to the billing and collections problems, UVA President James Ryan said in a message to employees.
New York-Presbyterian did not respond to multiple requests for comment.
Data editor Elizabeth Lucas contributed to this report.
Gov. Ralph Northam and the president of the University of Virginia committed to changing UVA Health System’s collections practices a day after Kaiser Health News detailed its aggressive and widespread pursuit of former patients for unpaid medical bills.
At the same time, the health system announced the departure of CEO Pamela Sutton-Wallace, who will leave in November to join New York-Presbyterian Hospital as a senior vice president.
Her exit “is in no way related” to the billing and collections problems, James Ryan, UVA’s president, said in a message to employees Tuesday.
UVA sued former patients for unpaid bills more than 36,000 times over six years, seeking repayment of over $106 million and often pushing families into onerous payment plans or bankruptcy, according to KHN’s investigation, published with The Washington Post.
Both Ryan and Northam expressed ignorance about UVA practices that were an open secret in Charlottesville, with hundreds of medical lawsuits filed each week.
Northam “was only just made aware of these practices,” said spokeswoman Alena Yarmosky, adding that he “is not involved” in day-to-day university operations.
Northam, a pediatric neurologist who oversees UVA’s board and often speaks about the need for affordable health care, said he is “absolutely concerned” about what the health system has been doing.
“I am glad to hear that UVA Health System is in the process of changing their policies and practices,” Northam said Tuesday in a prepared statement. He declined to offer remedies or agree to an interview.
Ryan said in a tweet late Monday that he had asked Sutton-Wallace last month to look into collection and litigation practices. KHN informed UVA of its findings on Aug. 1.
Fixing the problem “is complicated” in part because “we are legally obligated as a state agency to collect debts,” he said. “But we have discretion within those legal constraints to make our system more generous and more humane.”
Ryan and Sutton-Wallace also declined interview requests through spokesmen.
The health system is making a “comprehensive review” of its indigent care and financial assistance policies and will announce changes by the end of the week, said spokesman Eric Swensen.
“I learned about our aggressive billing and collection practices within the medical center a little over a month ago,” Ryan said in his tweet. “Part of striving to be both a great and good university is honestly facing problems you encounter and doing what you can to address them.”
The departure of Sutton-Wallace, named CEO five years ago, leaves the prestigious medical system with two top vacancies. Richard Shannon, executive vice president for health affairs, left in May.
UVA health system, which is taxpayer-supported and state-funded, is the latest medical center to face withering scrutiny over patient collections as insurance coverage continues to leave consumers financially vulnerable — despite passage of the Affordable Care Act in 2010.
High-deductible health plans, unaffordable premiums, short-term insurance that doesn’t cover preexisting illness and narrow provider networks all expose patients to unexpected bills of thousands or hundreds of thousands of dollars.
In recent months, journalists and academics have exposed collections practices in Baltimore, Memphis and New Mexico and at another Virginia hospital. A top federal health care regulator made a pointed reference to the coverage in a speech to hospital executives on Tuesday.
“We are learning the lengths to which certain not-for-profit hospitals go to collect the full list price from uninsured patients,” Medicare administrator Seema Verma said in a speech before members of the American Hospital Association. “These hospitals are referring patients to debt collectors, garnishing wages, placing liens on property and even suing patients into bankruptcy.”
Phil Galewitz and Emmarie Huetteman contributed to this report.
UVA Medical Center treated Heather Waldron in 2017 for complications from an intestinal malformation. The hospital sued her for $164,000 after she discovered her insurance had lapsed. That was more than twice what a commercial insurer would have paid for the same care.(Griffin Pivarunas for KHN)
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 filed 36,000 lawsuits against patients seeking a total of more than $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 hospital bills are a leading cause of personal debt and bankruptcy across the nation, 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 seeks payment, pursuing poor as well as middle-class patients for almost all they’re worth.
KHN’s findings, based on court records, documents and interviews with hospital officials and dozens of patients, show UVA:
Sued patients for as much as $1 million and as little as $13.91, and garnished thousands of paychecks, largely from workers at lower-pay employers such as Walmart, where UVA took wages more than 800 times.
Seized $22 million over six years in state tax refunds owed to patients with outstanding bills, most of it without court judgments, under a program intended to help state and local governments collect debts.
Sued about 100 patients every year who also happened to be UVA Health System employees and filed thousands of property liens over the years, from Albemarle County all the way to Georgia.
Dunned some former patients an additional 15% for legal costs, plus 6% interest on their unpaid bills, which over years can add up to more than the original bill.
Has the most restrictive eligibility guidelines for patient financial assistance of any major hospital system in Virginia. Savings of only $4,000 in a retirement account can disqualify a family from aid, even if its income is barely above the 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 worth at least as much as those breaks. Democratic Gov. Ralph Northam, a pediatric neurologist, oversees its board.
UVA 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.
“Sending unpaid bills to a collection agency or pursuing a civil claim is a last resort,” said UVA Health System spokesman Eric Swensen. Two years ago, he said, the health system limited lawsuits to cases in which patients owe more than $1,000. “For the vast majority of patients, we are able to agree upon workable payment plans without filing a legal claim,” he said.
In addition, UVA is “making a comprehensive review” of its charity care rules and “considering policies to provide additional financial assistance to low-income patients not covered by our existing charity care policies,” he said.
Swensen declined to discuss individual cases, 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 institutions. Johns Hopkins Hospital in Baltimore has sued patients 240 times a year on average, 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 annually, 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.
Waldron learned after her UVA hospitalization that a computer error involving a policy bought on healthcare.gov had led her insurance to lapse.(Griffin Pivarunas for KHN)
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 that can require patients to pay more than $6,000 before insurance kicks in. Virginia’s Medicaid expansion, effective this year, covers families with low income 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 members. In addition, experts say such bills often have little connection to the cost of care. Insurers obtain huge discounts off hospital sticker prices — 70% on average in UVA’s case, according to documents it files with Medicare.
UVA offers uninsured patients 20% off to start and an additional 15% to 20% 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 Heather 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, where the UVA Health System is located, to supplement a courts database compiled by the nonprofit Code for Hampton Roads, which works to improve government technology.
The picture that emerges is of a trusted institution whose practices violate its stated public mission, with little accountability or 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 said, “UVA has ruined us.”
‘Here For A Hospital Case?’
UVA sues so many patients that District Court Judge William Barkley doesn’t announce the cases as he takes the bench each Thursday in the historic brick courthouse in Charlottesville. On this day, he waves a thick stack of litigation at defendants, asking, “Is anybody here for a hospital case?” Nobody needs to ask which hospital.
A recent NPR report noted that nonprofit Mary Washington Healthcare, in Fredericksburg, Va., had 300 cases in court in one month. (Following that report the hospital announced that it would suspend the practice of suing patients for unpaid bills.)
Barkley’s court often handles 300 UVA suits in a week, data shows.
The court often operates like a UVA billing office. UVA sends collections representatives, not lawyers, who sit near the judge’s bench. They give patients two weeks to commit to an interest-free payment plan, according to courtroom meetings witnessed by a reporter. Otherwise, “we’re already going to be reviewing it for garnishment,” a UVA official tells a car accident victim. With bills often in the tens of thousands of dollars, even the five-year, interest-free plans are unaffordable, patients said.
Swensen said patients in court would have already received “four to five” bills over several months and notifications about potential financial assistance.
Zann Nelson — who is 70, lives in Reva, Va., and was sued by UVA for $23,849 a few years ago — is a rare patient who fought back. Admitted with a newly diagnosed uterine cancer, she was bleeding and in pain when she signed an open-ended payment agreement. In court, she argued it was so vague as to be unenforceable. (C-Ville Weekly, a local paper, wrote about her case in 2014.)
She lost. The judge, according to court records, said that Nelson had “the ability to decline the surgery” if she didn’t like the terms of the deal. She lived with a lien on her farm until she managed to pay off the debt.
Zann Nelson, who fought back in court against a UVA Health System lawsuit, lost her case after a judge said she had “the ability to decline the surgery” needed for cancer if she didn’t agree to UVA’s terms.(Jay Hancock/KHN)
‘Can’t Afford To Go Back’
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.
Yet UVA offers financial assistance that’s more limited than any other major health system in Virginia, according to an analysis of policies at organizations including Inova, Sentara Healthcare, Riverside Health and Carilion Clinic.
To qualify for help, UVA patients must earn less than 200% of federal poverty guidelines ($34,000 for a couple) and own less than about $3,000 in assets, not counting a house, according to the hospital’s website and guidelines UVA files with the state.
Carilion Clinic, by contrast, provides aid to families with income up to 400% of poverty guidelines and assets of less than $100,000, other than a house. If bills at Riverside Health exceed household income over 12 months, the hospital forgives the whole amount.
Sentara slashed lawsuit volume by using software to rule out patients who were unlikely to pay, said spokesman Dale Gauding. “We write off a lot of bad debt rather than put someone through a judgment they can’t pay and an additional black mark on their credit,” he said.
The only other policy in Virginia similar to UVA’s is that of VCU Health, a sister state hospital system with the same income and asset guidelines. In July, VCU started offering help to some patients with “catastrophic” and “prohibitively expensive” bills who don’t otherwise qualify, a spokesman said.
“We are considering those updates,” Swensen said of VCU’s changes. He noted that for the most recent fiscal year UVA approved almost 10,000 applications for charity care. Most of the patients who qualify pay nothing beyond a $6 copay, he said.
Carolyn Davis got injections at UVA Health System to treat back pain that her insurer did not cover. UVA rejected her application for financial assistance because her husband, a Hardee’s cook, had $6,000 in a Hardee’s retirement account.(Jay Hancock/KHN)
UVA sued Carolyn Davis, 55, of Halifax County, for $7,448 to pay for nerve injections to treat back pain that she hadn’t realized would be out-of-network.
Her husband is a cook at Hardee’s, taking home $500 to $600 a week, she said. UVA refused their application for financial assistance because his Hardee’s 401(k) balance of $6,000 makes them too well-off, she said.
“We don’t have that kind of money,” Davis said. The hospital insisted on a monthly payment of $75. She was meeting it by charging it to her credit card at 22% interest.
Charges for Davis’ treatment were about twice what a commercial insurer would have paid, according to an estimate by WellRithms.
Sometimes patients who are prepared to pay cash for UVA treatment find they can’t afford the charges. Wayne Williams, 43, of Charlottesville, is a custodian at a community college. He was uninsured but feared he had strep throat last year.
Wayne Williams, a community college custodian, went to the UVA emergency room for a sore throat and came out with a $6,931 bill.(Courtesy of Wayne Williams)
“I thought they were going to give me some antibiotics,” he said.
Instead, UVA’s emergency department gave him a CT scan, a bill for $6,931 and, when he didn’t pay, a lawsuit. UVA did give him a 30% discount based on his financial circumstances, he said — meaning the sore throat would cost about $4,800.
WellRithms calculated that a commercial insurance company would have paid $992 for the care Williams received, which would have covered costs and generated a profit.
Leigh Ann Beach, 37, of Palmyra, experienced how differently hospitals treat those who cannot pay after hurting her ankle in a bike accident.
Rising premiums left her uninsured when she fell off a bike and hurt her ankle last year. Her husband works in construction to provide for their family with seven children. A rainy 2018 washed out working days and his income. They couldn’t afford their $667 monthly insurance premium.
Sentara Martha Jefferson Hospital, which first treated her, canceled the entire $4,650 bill in light of her family’s income, her paperwork shows. UVA, where she got surgery and metal implants, sued her for $9,505 and rejected her request for financial help.
A UVA representative said she could sell some acreage from her small rural home to pay the bill, she said. She limps and is in pain, but “I can’t afford to go back,” she said.
Resorting To Bankruptcy
When Jesse Lynn, 42, of Orange County, bought short-term coverage as a bridge between policies, he and wife Renee didn’t realize the plan considered Jesse’s old back problems a preexisting illness, and therefore would not pay for treatment.
After back surgery at Culpeper Medical Center, a UVA affiliate, he came out with a bill for about $230,000, Renee Lynn said.
The surgeon reduced his portion of the charges — from $32,000 to $4,500, which they thought was reasonable. They asked for a similar break or a payment delay from UVA. “We are not a lending institution,” the billing office told her, she said.
The Lynns decided bankruptcy was their only option.
“I probably see at least a couple a month,” said Marshall Slayton, a Charlottesville bankruptcy lawyer, holding up a new file. “This is the third case this week.”
UVA said it doesn’t foreclose on primary residences. But often a UVA lawsuit leads to home loss because patients’ credit is downgraded and they cannot keep up with hospital payment plans and mortgages.
Property liens do give UVA a claim on the equity in patients’ homes.
“We see a lot of them,” said Tina Merritt, a partner with True North Title in Blacksburg. “And a lot of people don’t even know until they go to sell the property.”
It took Priti Chati, 62, of Roanoke six years to pay a $44,000 UVA bill for brain surgery and have a home lien removed last year, court records show. She had had a pre-Obamacare policy that did not cover preexisting illness. The health system seized bank funds intended for her daughters’ college costs, she said. She sold jewelry and borrowed from friends, eventually paying more than $70,000 including interest, she said.
Paul Baker, 41, of Madison County ran a small lawn service and with his wife owes more than $500,000 for treatment after their truck rolled over. He is grateful to UVA “for saving my life,” he said. But he is “frustrated they are ultimately taking my farm” when he sells or dies, a result of UVA’s lawsuit.
Swensen said the medical center gave $322 million in financial assistance and charity care in fiscal 2018. But legal and finance experts said that’s not a reliable estimate.
The $322 million “merely indicates the amount they would have charged arbitrarily” before negotiated insurer discounts, said Ge Bai, an accounting and health policy associate professor at the Johns Hopkins Carey Business School.
The figure is “based on customary reporting standards used by hospitals across the U.S.,” Swensen said.
Insurers would have paid UVA only $88 million for that care, according to an accounting of unpaid bills presented in September 2018 to the UVA Health board. Even that unpaid figure did not come out of UVA’s purse since federal and state governments provided “funding earmarked to cover indigent care” for almost all of it — $83.7 million, according to Bai.
The real, “unfunded” cost of UVA indigent care: $4.3 million, or 1.3% of what it claims, according to the document.
“That’s nothing,” given how much money UVA makes, Bai said. “Nonprofit hospitals advance their charitable mission primarily through providing indigent care.”
The hospital recorded an additional $109 million in uncollectible debts not considered indigent care, the document shows.
Nacy Sexton was close to graduation from the University of Virginia when UVA Health System blocked his enrollment because of an outstanding medical bill.(Julia Rendleman for KHN)
Nacy Sexton, who is in his 30s and lives outside Richmond, hoped he might get a break on his medical bills as a student enrolled at Virginia. He was close to graduation in 2015 when he was hospitalized for lupus. After he was unable to cover the reduced bill offered by the hospital, the university blocked his enrollment, a notice he received from student financial services shows.
“The university places enrollment holds on student accounts for many reasons, including unpaid tuition and medical bills,” said university spokesman Wesley Hester. This semester the university has “active holds” on 20 students because of unpaid medical center bills, which might or might not block their attendance depending on when the hold was placed, he said.
Sexton still has about $4,000 to go on a bill that he said was more than $30,000 before UVA’s discount, a fundraising campaign and other payments. He hopes to re-enroll and finish his degree in education next year.
“When you get sick, why should it affect your education?” he asked.
Shirley Perry was a registered nurse at the medical center who was “so proud of working at UVA,” said her mother, Vera Perry. She became chronically ill, lost her job and insurance, and then needed treatment from her former employer. UVA sued her for $218,730 plus $32,809 in legal fees. She died last year at age 51, with a UVA lien on her townhouse. It was auctioned off on Aug. 7 at the Albemarle County Courthouse.
For Heather Waldron, the path from “having everything and being able to buy things and feeling pretty good” to “devastation” began when she learned after her UVA hospitalization that a computer error involving a policy bought on healthcare.gov had led to a lapse in her insurance.
She is now on food stamps and talking to bankruptcy lawyers. A bank began foreclosure proceedings in August on the Blacksburg house she shared with her family. The home will be sold to pay off the mortgage.
She expects UVA to take whatever is left.
KHN analyzed Virginia civil case records from both the district and circuit courts from July 2012 through June 2018, based on the date a case was filed. These case records were acquired from Ben Schoenfeld, a volunteer for Code for America, a nonprofit focused on improving government technology. Schoenfeld compiles court records that are available directly from Virginia’s court system (from both circuit and district courts) and posts them on the website VirginiaCourtData.org.
The Circuit Courts of Alexandria and Fairfax do not use the statewide case management system and are not included in this analysis.
The online circuit court cases do not include the amount for which the plaintiff sued. KHN went to the Albemarle Circuit Court (where most of the UVA circuit cases were filed) and looked up each of over 900 cases by hand to obtain the dollar amount, which totaled over $60 million.
The online district court cases do include a principal amount sought in a “Warrant in Debt” case. However, if the case is settled or dismissed, the principal amount is zero. Therefore, KHN’s reporting of the total for which UVA has sued its patients during this period is likely a low estimate.
KHN focused on district cases that were “Warrant in Debt” cases and circuit cases that were “Complaint — Catch-all” or “Contract Action.” UVA sues to recover patient debt from all three categories. For cases brought by the University of Virginia, the plaintiff names (as entered by the court) vary widely: “University of Virginia,” “Rectors and Visitors of UVA” or just “UVA” are some examples. We included cases that mentioned the UVA Physicians Group and Health Services Foundation (although these were much less prevalent). In some cases, the UVA Medical Center was named specifically; in others, it was not. KHN analyzed cases brought by the university whether or not the case specifically mentioned the medical center, knowing that some cases omit this detail. We took a random sample of 30 “Warrant in Debt” cases from the Albemarle District Court in 2017 that were filed by “Rectors and Visitors” but did not specify the medical center. We looked up the original records at the courthouse; each one was related to the medical center.
KHN also found several 2012 cases filed in the Albemarle Circuit Court by UVA that were not in the public data available online, which suggests that the data is not necessarily complete.
KHN contacted UVA directly on multiple occasions. We filed several public records requests for the number of cases involving medical debt and the total amount sought, as well as the total amount recovered. Each time our request was denied.