UVA Health to Cancel Tens of Thousands of Judgments and Liens

On April 19, 2021, the University of Virginia Health System announced that it would be canceling a pool of judgments and liens dating back to the 1990s.  The move will apply to all liens and judgments filed against households that make less than 400% of the federal poverty level, or about $106,000 for a family of four.

UVA has been suing patients for unpaid hospital bills for decades. Since Virginia law allows for post-judgment remedies, many of these lawsuits resulted in wage garnishments and liens which attached to real property and had to be satisfied before selling the property.  Those families that already paid due to lawsuits or liens will not get their money back.

In September 2019, UVA created a new advisory council to make suggestions and draw up more fair and equitable policies. For the past year and a half, that team has been diving deep into various solutions. The policies were developed following consultation with a local community advisory council empaneled to ensure the local community was represented as part of policy decision-making. In addition, a study of national hospital peers’ billing and collections practices for low-income, underinsured and uninsured patients was also conducted to help inform final policies. These policies build upon previous changes to UVA’s billing and collections policies instituted in January 2020.

“We have been very deliberate in studying this. We did not take it lightly, and we committed to fixing it. I think we’ve absolutely hit a home run here,” said  Douglas E. Lischke, UVA Health’s chief financial officer Lischke, “We feel that it is on par, better than most health systems, and we’re proud of that.”

In addition to forgiving liens and judgments of patients meeting the required criteria, UVA will establish an Ombudsperson’s office to help patients navigate payment options and ensure a fair, impartial assessment of individual cases. UVA Health has also developed a policy for catastrophic care to ensure public access to emergency services.

insideARM Perspective:

Despite the industries efforts to provide guidance regarding best practices in collecting medical debt in the face of increased accounts entering the medical collections cycle, in just the last two weeks, we’ve seen a new law related to healthcare collections passed in New Mexico, and now this announcement from the UVA Healthcare.  Thus, it seems like the focus on healthcare collections isn’t going anywhere any time soon.  With the current laser focus on medical collections, we can surely expect additional legislation and perhaps similar announcements from other healthcare facilities.