An Unexpected Break: UVA Health System to Hit Cancel on Thousands of Patient Lawsuits
After years of suing thousands of patients annually for unpaid bills, the University of Virginia Health System (UVA) is wiping the slate clean for countless lucky patients. As of Monday, April 19, UVA announced it will cancel a massive backlog of court judgments and liens – some of which date back to the 1990s.
Considering the decades of lawsuits and patients with unpaid bills, some of which sit at tens or hundreds of thousands of dollars as reported by Kaiser Health News (KHN) in 2019, this move will certainly serve as a massive relief for countless families.
UVA will release all liens and judgements filed against households making less than 400 percent of the federal poverty level, or about $106,000 for a family of four. “This is a proud moment for us,” said UVA Chief Financial Officer, Douglas Lischke. “We want our financial care to be as good as our clinical care.”
According to many health-care finance experts, this decision to wipe out liens that can drain home equity for years after a hospital visit is extremely rare. “This is very significant and a much-needed and overdue step,” said Erin Fuse Brown, a law professor at Georgia State University who studies hospital billing. “I don’t know if I’ve heard of that [lien abolition] happening anywhere else.”
UVA Response
UVA began making changes in response to KHN’s 2019 report that the health system had sued patients 36,000 times over six years for more than $100 million. It was found that, often, these lawsuits amounted to a cost far higher than what an insurer would have paid for their care. UVA’s response was to suspend lawsuits against patients as well as wage garnishments. They also increased discounts for the uninsured and expanded financial assistance.
In an effort to consider more permanent changes, the system also named an advisory council of UVA officials and community leaders. They delivered their recommendations in October 2020.
Although unorthodox, UVAs recent decision to substantially reduce lawsuits and erase liens falls short of moves recently made by VCU Health, their sister system base at Virginia Commonwealth University. VCU pledged to stop suing all patients and is abolishing all old judgements and liens regardless of family income.
While the number of outstanding UVA Health judgements is unknown, VCU eventually found about 80,000 statewide. In Virginia, liens expire after 20 years, but, according to KHN, UCA was going to the trouble to renew claims dating back to the 1990s.
“There is always more that could be done,” said Jenifer Bosco, a staff attorney at the National Consumer Law Center who specializes in health care. “But providing assistance to families with income of up to 400 percent of the poverty level is a great step.”
UVA court judgment and lien cancellations should take more than a year according to Lischke. The changes to billing and collections, including improvements to financial assistance will cost the system about $12 million a year.
Changes to Improve
The steps that health systems like UVA and VCU are taking to improve collection policies and offer additional assistance, represent a significant shift in how major health systems and hospitals have and continue to approach medical-debt collection. While it is still unclear how UVA’s decision will influence other health systems moving forward, it is certainly a significant win for impacted patients.
