UVA Health Still Squeezing Money From Patients — By Seizing Their Home Equity

Lambert here: Medicaid can’t seize your home (see NC here and here) if the University of Virginia already has. So there’s a bright side (and I wonder how many other health care systems are doing just what UVa is doing. In fact, there are probably consultants with PowerPoint decks out there right now, explaining how to do it).

By Jay Hancock, Kaiser Health News. Originally published at Kaiser Health News.

Doris Hutchinson wanted to use money from the sale of her late mother’s house to help her grandchildren go to college.

Then she learned the University of Virginia Health System was taking $38,000 of the proceeds because a 13-year-old medical bill owed by her deceased brother had somehow turned into a lien on the property.

“It was a mess,” she said. “There are bills I could pay with that money. I could pay off my car, for one thing.”

Property liens are the hidden icebergs of patient medical debt, legal experts say, lying unseen, often for decades, before they surface to claim hard-won family savings or inheritance proceeds.

An ongoing examination by KHN into hospital billing and collections in Virginia shows just how widespread and destructive they can be. KHN reported a year ago that UVA Health had sued patients 36,000 times over six years for more than $100 million, often for amounts far higher than what an insurer would have paid for their care. In response to the articles, the system temporarily suspended patient lawsuits and wage garnishments, increased discounts for the uninsured and broadened financial assistance, including for cases dating to 2017.

Those changes were “a first step” in reforming billing and collection practices, university officials said at the time.

However, UVA Health continues to rely on thousands of property liens to collect old bills, in contrast to VCU Health, another huge, state-owned medical system examined by KHN. VCU Health pledged in March to stop seizing patients’ wages over unpaid bills and to remove all property liens, which are created after a creditor wins a court judgment.

Working courthouse-by-courthouse, VCU Health now says it has discovered and released 45,000 property liens filed against patients just in Richmond, its home city, some dating to the 1990s. There are an estimated 35,000 more in other parts of the state. Fifteen thousand of those have been canceled and they are working on the rest, officials said. These figures have not been previously reported. The system is part of Virginia Commonwealth University.

VCU Health’s total caseload is “a huge number” but perhaps not astonishing given the energy with which many hospital systems sue their patients, said Carolyn Carter, deputy director of the National Consumer Law Center.

Despite having suspended patient lawsuits, UVA Health has continued to create property liens based on older court cases, court records show. The number of new liens is “small,” said UVA Health spokesperson Eric Swensen.

An advisory council of UVA Health officials and community leaders is expected to deliver new recommendations by the end of October, Swensen said. The council, whose schedule has been slowed by the coronavirus crisis, has discussed property liens, Don Gathers, an activist and council member, said in an interview this summer.

Nobody knows how many old or new UVA Health liens are scattered through scores of Virginia courthouses. The health system, which has sued patients in almost every county and city in the state, has failed to respond to repeated requests over two years to disclose the number and value of its property liens.

But in Albemarle County alone, which surrounds the university’s Charlottesville home, “there are thousands” of UVA Health judgments filed in the land records, which creates a lien, said Circuit Court Clerk Jon Zug.

Not just Virginia homes are at risk. UVA Health lawyers search the nation for property or other assets owned by patients with outstanding bills and have filed liens in Maryland, West Virginia, Ohio and Florida, court records show.

The system put a lien on a Nevada vacation condo owned by Veronica Musie’s family a decade ago over a $30,600 hospital bill, said Musie, who lives in northern Virginia. The family has since paid the debt.

Virginia property liens expire after 20 years. But UVA Health often renews them. Since 2017, just in Albemarle County, it has renewed more than three dozen liens. That means the medical system could seize families’ home equity until 2039 for bills dating to the last century.

UVA Health and other medical systems rarely force the sale of a home to claim money. Instead, they wait for families to refinance or sell, taking their cut at the settlement table. But with 6% simple interest accumulating year after year after the court judgment, as allowed by Virginia law, the final amount owed can be much more than the original charges.

UVA Health treated Hutchinson’s brother for heart disease in the early 2000s. The unpaid bill was $24,868. The system laid claim to their mother’s home because he was one of her heirs. The claim is up to $38,000 now, she said, because of interest charges. Hutchinson has been disputing it for more than a year.

VCU Health and its MCV Physicians affiliate estimate that eliminating two decades of property liens in courthouses across the state, which they began to do last year after KHN published its reports, won’t be finished until spring.

Richmond was especially problematic. Because releasing 40,000 Richmond liens by hand would have been impractical, VCU Health got a judge’s permission to do it with computer code.

Creditors such as UVA and VCU don’t need addresses to create liens. All they have to do is file a judgment in county or city land records. If debtors own any property there, title companies won’t approve a sale until the debt is paid, often with home equity.

Often owners don’t know debts exist until paralegals unearth them when homes are sold, property pros say. Old debts can create liens on newly acquired real estate.

“It could be your grandmother’s house, and as soon as you’ve inherited it, and you’ve got judgments, those [liens] are now attached,” said Richmond Court Clerk Edward Jewett.

Frequently debtors own no property, so judgments in the land records expire without hospitals or other creditors getting anything.

VCU and MCV had no idea how many liens they had placed across the state until they began investigating last year after KHN’s inquiries, officials said.

“It’s an incredibly manual process” to cancel the claims, partly because computer systems at many courthouses prohibit an easy tech solution, said Melinda Hancock, VCU Health’s chief administrative and financial officer. But it’s worth it to remove a burden on patients, she said, adding, “This is an outdated collections practice whose time has come and gone.”

But many medical systems still do it, consumer debt experts say, noting that obtaining a complete picture of hospital property liens is impossible.

Land and judgment records are held by thousands of local court clerks, often using separate computer systems. Records are difficult or impossible to obtain in bulk.

“There is not a good nationwide study that I know of that looks at how widespread this is, how many consumers are affected, what’s the average size of a lien,” said Erin Fuse Brown, a law professor at Georgia State University who studies hospital billing.

Mike Miller and Kitt Klein are among those hoping UVA Health follows VCU Health in canceling thousands of property liens. They fear a $129,000 judgment won by UVA in 2017 against Miller will cost them the equity in their home in Quicksburg, Virginia.

They make about $25,000 a year. Miller, a house painter, was insured but received out-of-network radiation at UVA that doctors said was necessary to treat his lung cancer.

After KHN wrote about his case a year ago, benefits firm WellRithms analyzed his UVA bill and found that a commercial insurer would have paid a little more than $13,000, not $129,000, for the treatment.

“We know all [health care] providers bill a lot, but usually ‘a lot’ is three to six times what reasonable prices would be,” said Jordan Weintraub, vice president of claims for WellRithms. Trying to collect 10 times as much, she said, “is really out there.”

UVA Health does not comment on individual patient cases, Swensen said.

KHN found last year that UVA frequently sued patients for far more than what the system could have collected from insurance.

Early this year Miller and Klein emailed UVA President James Ryan, asking for help in reducing or eliminating the judgment. His office phoned in February, saying it would review the case.

“I became very emotional, filled with gratitude,” Klein said. “I couldn’t talk.”

Months went by with no contact. Recently a lawyer from the office of Virginia Attorney General Mark Herring offered to settle the case for $120,000, Klein said, reducing the bill by only $9,000. They don’t have the money. Miller’s cancer has returned. Interest is mounting at 6%.

University officials do not comment on legal matters or individual cases, a Ryan spokesperson said. Herring’s office did not respond to requests for comment.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

USE OUR CONTENT

This story can be republished for free (details).

Subscribe to KHN’s free Morning Briefing.

Print Friendly, PDF & Email
This entry was posted in Health care, Income disparity, The destruction of the middle class on by .

About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

32 comments

  1. jackiebass

    People believe the own their homes. The reality is you are only a care taker. Your home can be seized for the most unreasonable reason by a variety of predators, including the government. Where I lived you used to be able too make an arrangement with health care providers to pay a bill over time if you you lacked insurance or insurance didn’t pay the full bill. Now they have become heartless demanding immediate payment. If you can’t pay they impose very high interest rate charges. Even copays for an office visit are due at he time of service. Health care has become just another business. You can protect you assets but it now is more difficult and takes a longe time frame. I sometimes think you are better off if you own nothing and survive on your income only.

    Reply
    1. Carolinian

      As I understand it so called nonprofit hospitals are supposed to negotiate their inflated charges to the uninsured as part of the social bargain that gives them breaks on taxes etc. Perhaps anyone entering the UVA system should have a lawyer on speed dial.

      Reply
    2. Kurtismayfield

      Remember, you are not a patient on medical bills. You are the guarantor now. This means they see you as a purely financial relationship.

      Reply
  2. Bob Hertz

    Thanks for posting. I am fairly expert on the outrages of normal medical debt collection — whether by the original provider, or by the vulture debt-buyers who come in later — but I was not aware of how many property liens exist.

    One solution would be to have Medicare be the payor of last resort. In the American system, without global budgets, hospitals do have to get some money out of each patient. Let Medicare pay its relatively low amounts on each of these old debts.

    I would be quietly pleased if the executives at a place like UVA for were hit with lawsuits and civil penalties for filing these leases.

    Reply
  3. flora

    No words.

    There’s a Dem pol here making a first time run for the Senate. Said pol’s ads claim pol is for affordable health care, against surprise billing, and against Medicare For All. right… (You can’t make this stuff up.)

    Reply
    1. Katiebird

      That ad infuriates me. And paired with the her ads featuring Republicans assuring us that she will vote With Trump (whatever that means) I have to wonder why she is running as a Democrat. Or why I should bother to vote for her since she is running against everything I support.

      Reply
  4. Mark Sites

    Just wow. The sheer numbers of liens and lawsuits point to a very sophisticated for profit legal debt trap. My guess is VCU contracted out their debt collection, and permitted the provider the means to keep the flow of business going. In perpetuity it seems. Just another exhibit as to how the United States’ health care system inflicts economic pain and suffering deliberately and for profits.

    Reply
  5. YuShan

    For profit healthcare is such a scam. Here (UK) we have universal free healthcare for all. Yes, you pay some extra tax for that, but the great majority of the population is happy with that. You can see how popular it is by the reaction of the public if they even suspect that a politician might touch it. It would be political suicide.

    Reply
    1. Alex Cox

      UK politicians work tirelessly to make sure that is not the case. Tony Blair (remember him?) was a huge advocate of “patient choice” – New Labour’s code for privatizing as many NHS services as possible. The Tories and Lib Dems have accelerated the attrition and privatization. Probably the greatest damage was inflicted by New Labour’s property scams involving “public private partnerships” which have saddled the NHS with debt for generations to come.

      Reply
  6. timbers

    Guess we all need to place tattoos on are bodies that read something like “Your only recourse of payment of medical care performed on this body is thru my provider only you agree to forfeit all other payment claims”

    Reply
    1. Edward

      Some students have paid for college by wearing advertisements all the time. Maybe sick people could try this to pay their bills.

      Reply
  7. Edward

    The basic problem here is that people need to vote for politicians like Bernie Sanders, who support a change to a single payer system. The people in Washington are comfortable with the status quo. The people who are losing from this system– the public, need to be stronger advocates for their interests during the elections. Who else will be their advocates?

    Reply
    1. Arizona Slim

      For [family blog’s] sake! I did vote for Bernie Sanders in not one, but two, Arizona Democratic primaries. The first, in 2016, featured massive voter suppression. Remember those five-hour lines in Maricopa County?

      Second time, well, I hate to say this, but Bernie’s 2020 Arizona campaign had all the energy of a wet noodle. No, I take that back. I really shouldn’t be insulting wet noodles like that.

      Reply
      1. Edward

        I voted for him too, and I also have my doubts that Biden actually won the primary, since our voting system is 1) rife with opportunities for cheating and 2) run by ethically dubious people. Sanders offered voters a real chance for affordable health care.

        I don’t remember if Sanders’ campaign was still viable when it reached Arizona; he may have already lost by then. Did Biden have a stronger campaign?

        Reply
    2. Sue inSoCal

      Edward, I am sympathetic. However, the DNC will never let a Sanders or a Warren near anything. Can’t say we didn’t try…

      Reply
  8. Timothy H

    What is the legal basis for being able to file these liens? I understand a “mechanics” lien, where work done on a property can be turned into a lien against that property, but there is something else going on here. A medial claim is (should be?) completely separate from property debt.

    Reply
    1. Adam1

      I would suspect that the underlying problem is that it’s simple to place a lien on a property because historically most liens were for reasonable unpaid amounts so the courts have historically assumed by default that lien filings are for reasonably fees. I doubt anyone has tested the filing practices. In the past unreasonable liens, I would suspect, were filed by people with grievances and they could be easily sorted out by a judge in dispute. The system can’t sort out systemic unreasonable claims as it is currently designed.

      Reply
      1. Timothy H

        I think this is where we need an atty to weigh in because I shouldn’t be able to put a lien on your property just because I say you owe me a debt. I live in WA state and know I couldn’t do that to you if you also lived here. Maybe if you live in VA I can just put a lien on your property on a whim. If so, that’s what needs to get fixed.

        Reply
        1. TheMog

          The article does at least appear to imply that the health care provider needed to get a court judgement first before they’re able to put a lien on the property.

          Reply
          1. Timothy H

            Sure, but doesn’t that strike you as way out of line? As in, even more out of line than the crazy medical bill that started it?

            Reply
  9. Hayek's Heelbiter

    Lest we forget. [Quotes are from NC post below; BOLD is in original]

    https://www.nakedcapitalism.com/2014/02/gaius-publius-obama-got-20-million-healthcare-industry-2008-killing-single-payer-part-deal.html

    First, pre-election Obama, speaking in 2003 as a U.S. Senate candidate:

    “I happen to be a proponent of a single payer universal health care program.” (applause) “I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody. … A single payer health care plan, a universal health care plan. And that’s what I’d like to see.”

    Yes, indeed. I was the first audience member to be admitted to the St. Peter’s College (Jersey City, New Jersey) gymnasium in January 2008. Like every other member of the crowd, I was tearful when pre-presidential nominee, Barack Obama told the story of his mother on her deathbed and his struggle with the insurance companies. “When I am president, I will fight tooth and nail for single payer.”

    I did everything in my power to campaign for him based on that single sentence.

    Now let’s look at post-election Obama…

    As lawmakers on Capitol Hill hammer out legislation to overhaul the nation’s health care system this year, Health and Human Services Secretary Kathleen Sebelius says that a single-payer option is not on the table…

    Asked if the administration’s program will be drafted specifically to prevent it from evolving into a single-payer plan, Sebelius says: “I think that’s very much the case, and again, if you want anybody to convince people of that, talk to the single-payer proponents who are furious that the single-payer idea is not part of the discussion.”

    Reply
    1. N

      I think at the time they were trying to cooperate with Republicans and pass something they would like (the ACA), but that backfired. They should’ve gone for the moonshot and passed Universal. Hindsight being 20/20 and all…

      Reply
  10. Leftie

    We REALLY do have the best Health Care system in the world, right ??? Say you happen to get sick. You look for treatment. The FIRST question they ask is NOT what’s wrong with you, why did you come in today but rather, YA GOT ANY INSURANCE ?? I still can’t figure out why poor people die at such an alarming rate as opposed to rich folks though ? Maybe y’all could help me with that ? The sooner these vulture vermin are looking for work, the sooner we can join ALL the other countries in the world and ALL get the same good health care this country can provide.

    Reply
    1. JTMcPhee

      You’re writing sarcasm, I know. Not so clear we have the “best Health Care system in the world” more that “we” can even provide it if the political will were present. Too many incentives and feedbacks pushing back against it. Quality of care has taken a dump, driven by privatization, corporatization and the ICD-CPT-HCPCS coding systems. New practitioners are often laser-focused on retiring their student loan debt and don’t seem to have the sense of calling that many older docs had (and I have had to deal with a load of them, for personal and family-member care and as a nurse.)

      Reply
  11. Bob Hertz

    Once you accept that hospitals should be funded through user fees, then eventually you wind up with monstrosities like this one.

    Non-profit institutions are just as bad as for-profit hospitals.

    By now, many hospitals do have a limitation on the charges faced by uninsured persons of modest incomes. These liens might have been initiated back when such limitations did not exist…..or else the patients were more middle class and did not qualify for assistance.

    Reply
  12. Doug

    UVA
    VCU
    MCV

    I wish these acronyms would be spelled out at least once in an article. Those of us that are not clued
    into what is being complained about have a hard time figuring out what is going on.

    Reply
  13. Sue inSoCal

    Actually, my jaw is on the floor. This must depend on state law ?? I recall state law controlling whether an adult child is responsible for an elderly parent’s debts. In the case of a parent’s racking up debt, at least in Ca, the child is not responsible for that debt at death. But I’ve never heard of this. That guy with the heart problems may have been a potential “heir,” however, he may be disinherited or otherwise be excluded from the estate. Their reasoning, and I use the term lightly, is a pretty big leap. This is frightening. Thanks for this. Just when you think things can’t get weirder…

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *