KHN: UVA Health Still Squeezing Money From Patients — By Seizing Their Home Equity
By Jay Hancock
October 19, 2020
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.