Virginia governor and UVA vow to revamp practice of suing patients as CEO exits

After emergency surgery at UVA Medical Center in 2017, Heather Waldron discovered her insurance had lapsed and she couldn't pay the $164,000 bill. (Griffin Pivarunas for KHN)

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.

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.

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Both Ryan and Northam expressed ignorance about UVA practices that were an open secret in Charlottesville, with hundreds of medical lawsuits often filed in a 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.

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.

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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.”

RELATED: Hospital sues thousands of patients who can't pay bills

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 the 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 BaltimoreMemphis 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 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.”

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

Phil Galewitz and Emmarie Huetteman contributed to this report.

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