Annie Washington is 60 years old, has diabetes and no insurance. If she needs to see a doctor, she winds up in the emergency room.
But while hospitals can’t turn indigent patients away, they can still bill them. And when patients can’t afford those bills, collection lawsuits often follow.
“I work at McDonald’s,” the Henrico County resident said after a recent hearing over an $860 lawsuit filed by the doctors group that staffs VCU Medical Center. “There’s no insurance there.”
Virginia medical providers filed more than 400,000 lawsuits over the past five years, netting more than $587 million in legal judgments against their patients, an analysis of state court records by the Virginia Mercury has found. The review relied on data collected by virginiacourtdata.org, which aggregates online state court records.
Of those, no medical provider filed more lawsuits or won more judgments than MCV Physicians, the VCU doctors group that sued Washington. The practice filed 43,330 suits between 2013 and 2017, winning more than $62 million in judgments.
“Legal proceedings are the absolute last resort for our organization and are not used unless patients do not contact us regarding their bill for over a year,” a spokesperson for MCV Physicians said in a statement.
VCU Medical Center is among the state’s largest hospitals going by patient beds and discharges, but that does not come close to accounting for the gap between MCV Physicians’ numbers and its nearest peers. For example, MCV filed 4,372 more lawsuits than Inova Healthcare, which has more patient beds at its Fairfax flagship hospital. MCV won about $20 million more in judgements than Inova.
When asked why the medical group filed more lawsuits than any other hospital or physician group in the state in the last five years, MCV Physicians pointed to the fact that it draws a “large and diverse patient population from all over the state.”
Because MCV Physicians is affiliated with VCU Medical Center in downtown Richmond, it offers financial assistance to its patients, too. According to the medical group, 86 percent of the account balances that were approved for financial assistance in 2017 were forgiven, meaning they were adjusted to $0.
According to Virginia Health Information, in 2016, VCU Health provided $340 million in charity care to its patients.
Top filers of medical debt lawsuits, 2013-2018Source: Virginia Mercury analysis of state court records.
|Medical Providers||Number of suits||Total judgments won|
|UVA HEALTH SYSTEM||28,625||$36,523,717|
|MARY WASHINGTON HOSPITAL||18,842||$47,384,636|
|ATLANTIC ANESTESIA INC||15,638||$23,598,900|
|EVMS ACADEMIC PHYSICIANS & SURGEONS HEALTH||13,716||$10,895,914|
|WINCHESTER MEDICAL CENTER||13,487||$28,859,958|
Some hospitals don’t sue at all, others try to avoid it
Hospitals say they have no choice but to try to collect, noting they’ve also been shouldering the burden of rising medical costs. According to the Virginia Hospital and Healthcare System, the state’s hospitals absorbed $543 million worth of bad debt in 2016, up from $419 million in 2008. Bad debt is essentially the difference between what hospitals billed their patients and what they were actually paid.
But in recent years, some Virginia hospitals have said they’ve taken deliberate measures to reduce the number of lawsuits they file, and the Mercury’s review has shown a modest decrease in both lawsuits filed and judgments won since 2015, dropping from $119 million to to $107 million.
Many health systems, such as Mary Washington Hospital and Sentara Healthcare, will forgive debt if a patient’s income is less than 200 percent of the federal poverty level, or $24,280 a year for an individual, and have sliding scales that they use after that to give additional discounts based on income.
Bon Secours, which operates hospitals in the Richmond and Hampton Roads areas, has similar financial assistance programs. It stopped pursuing patient debt lawsuits altogether around 2007, “because our mission is to provide compassionate, quality health care services to those in need, regardless of their ability to pay,” Emma Swann, a spokeswoman for the health system, said in a statement.
Sentara uses what executives call “predictive data analytics” like credit scores to tell if a patient can actually pay the bill. It’s allowed the system’s hospitals to reduce the number of lawsuits they file, stops them from wasting legal fees on lawsuits that won’t actually result in any dollars for the system and saves patients from dealing with the court system if they simply can’t afford the bill, explained Andy Weddle, Sentara’s vice president for revenue cycle.
The medical practices that merge with the system will eventually adopt similar billing practices, Weddle said, though it may take several years. That would explain why Sentara has filed the third-highest number of lawsuits in the past five years, he said, as those figures include both hospitals and physicians’ practices.
Officials with Sentara and Mary Washington said the ultimate goal of taking patients to court is to make sure the hospital has enough revenue to continue operating. That’s why they try to determine which patients aren’t paying because they can’t afford to and which just don’t want to pay.
Will Medicaid expansion help?
According to the Virginia Health Care Foundation, there were 718,000 people living without insurance in Virginia in 2016, the most recent year the data was available. They’re often in situations just like Washington’s — waiting to seek care for a chronic illness until they wind up with a pricey emergency room visit. Once they do, they have no way to pay for it.
Virginia is due to expand its Medicaid program in January to an estimated 400,000 people, and that will hopefully help some who are battling medical debt, said Carolyn Engelhard, associate professor of public health sciences and public policy at the University of Virginia.
But not everyone facing mounting doctors’ bills are uninsured. Medical debt is also a symptom of an increasingly expensive health care system, Engelhard pointed out, and even patients with insurance find themselves shouldering more of the cost.
“Even under the Affordable Care Act, people are carrying much higher deductibles and also there are the problems with going to specialists or physicians who are in network versus out of network, and all of those things can mean that people will have higher medical costs, which may lead to indebtedness,” Engelhard said.
Nearly 40 percent of adults were enrolled in high-deductible health plans in 2016, compared to 26 percent in 2011, according to the Centers for Disease Control and Prevention.
While these plans have cheaper monthly premiums, they require patients pay a certain amount out-of-pocket before the insurer will start covering part of the bills. Figuring out how to come up with the money has become increasingly difficult for many Americans.
“It’s impossible to anticipate every charge,” Engelhard said. “More and more we’re seeing, in order to control costs, insurers are offering narrower and narrower networks.”
There is conflicting economic data as to how often medical debt causes bankruptcy, Engelhard said. Some studies use only debt from inpatient hospital stays, while others include all medically-related financial hardships, like cases when a person must quit a job to care for a loved one due to an illness. If you included those factors, she said, likely about 20 to 30 percent of bankruptcies are caused by medical debt.
But even if the debt doesn’t lead to bankruptcy, there are a slew of repercussions for patients when they face a massive bill. Even 12 months after a major medical event, Engelhard said, patients tend to carry more credit card debt and have fewer liquid assets — like a car or house.
And if the debt reaches the court, the hospital or medical provider can garnish a patient’s wages.
Washington said she wouldn’t have been able to afford it if her case had gotten to that point. She was able to work out a payment plan with MCV Physicians before they began garnishing her pay check. But if that hadn’t happened, and they took more than $40 out of her $800 monthly income, she said she probably would have had to leave Richmond altogether.
A lifetime of payment
Washington will qualify for Medicaid next year under the expansion rules. But that’s not going to help her right now.
In a statement, MCV said it had tried to reach out to Washington in the past to get her enrolled in its financial assistance program. Washington denies that, and says she never heard back the first time she applied for Virginia Coordinated Care, VCU Health’s financial assistance program.
In either case, she re-applied a few months ago, though, and was enrolled on July 13. Her coverage will last until May 24, 2019, according to MCV Physicians, and she will be responsible for a 20 percent copay.
For many, $40 a month might be an annoying payment to make, at worst. But for Washington, it’s huge.
It’s $40 that can’t go toward buying a new car, after hers was wrecked when a drunken driver hit her in early June, she says. It’s $40 that she can’t use to pay for her diabetes medication, which she hasn’t been able to afford for almost a year.
She had been living in her car before the crash, and now she’s staying with family while she searches for a place to live.
“I understand why some people become homeless,” she said. “You don’t know what that person’s going through or what’s happened to them. You can’t judge them.”