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Ghost Bill: UVA Siphons Couple’s Tax Refund To Pay 20-Year-Old Medical Debt

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3 years ago

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The notice from the Virginia tax department puzzled a Charlottesville couple last October. It said their state income tax refund had been reduced because of an outstanding medical debt to the University of Virginia Medical Center. Instead of $220, they got $110.

Mystified, they contacted UVA for details about the unpaid bill. The answer astonished them. The medical center had asked the tax department to withhold the money for medical care their son received in 2001 and 2002.

Jane Collins and Anthony Blow received a notice last year from the Virginia tax department, which reduced their state income tax refund to offset outstanding medical debt.(Courtesy of Jane Collins)

“The amount is not the issue; it’s this whole idea that you can go after something that is so old,” said Jane Collins. “Maybe technically you are entitled to that money, but do you mean to tell me you can go into the deep recesses of your computer and now you’re going to take this?”

Initially, Collins couldn’t remember what the bill was for, and she no longer had paper records from nearly two decades ago.

According to financial documents the hospital sent Collins and her husband, Anthony Blow, late last year, the bills relate to three hospitalizations for their son, who was born prematurely and frequently hospitalized as a child.

Collins believes the 2001 hospital visits are probably related to a shunt her son had when he was 3 to relieve fluid buildup in his brain. She’s uncertain what the 2002 charges are for. The computer printouts she received from UVA list service codes and billed charges but don’t describe why he was hospitalized.

“I’m utterly confused by all of this,” said Collins, whose family is covered by the same employer plan they had then. “Eighteen years later, I don’t remember disputing anything about the bills.”

A spokesperson for the health system said patient privacy laws prohibit them from commenting on specific cases.

Virginia is one of at least a dozen states that can dock residents’ income tax refunds to pay delinquent medical debts, according to Richard Gundling, a senior vice president for the Healthcare Financial Management Association, an organization for finance professionals. In Virginia, state-affiliated hospitals like the University of Virginia Medical System and Virginia Commonwealth University Health System generally first attempt to collect money owed to them directly or by enlisting a collection agency.

If those efforts fail, they send the claims to the state tax department’s Set-Off Debt Collection Program. The tax department uses Social Security numbers to electronically match claims submitted by the hospitals with individual income tax refunds. When the system finds a match, it withholds all or part of the refund and sends it to the hospital.

In fiscal 2018, Virginia collected $68 million in individual debts through the program, a figure that includes medical bills and other types of debt owed to state and local government agencies and state courts, among others.

It’s a controversial way to collect medical debt, especially for care delivered decades ago.

“This gives a whole new meaning to surprise medical bills,” said Mark Rukavina, business development manager at Community Catalyst, a consumer advocacy organization. “Digging up a bill that’s 20 years old and informing someone that they owe it by attaching their tax refund is not good policy.”

State laws prohibit private collection agencies from suing consumers after a specified period of time, often three to six years. The laws don’t extinguish the debt, but they protect consumers from being taken to court many years later, when documents may be lost and memories fuzzy.

But there’s no similar time limit for going after Virginia consumers’ tax refunds through the setoff program.

“[This] hospital is an agency of the commonwealth and the statute of limitations doesn’t apply to the commonwealth,” said Caroline Klosko, an attorney at the Legal Aid Justice Center in Charlottesville. Klosko said she worked with a client who faced a similar refund capture by UVA for a medical debt that was six years old.

In addition to the age of the debt, concerns over whether the amount billed is accurate are often legitimate.

What if people are charged too much in the first place? Federal law requires nonprofit hospitals to have patient financial assistance policies and to publicize them widely. For-profit hospitals generally seem to have similar programs, said Rukavina. But income standards and other requirements to qualify for discounted or free care vary widely and may not be easy for patients to find.

A new state law will prohibit UVA and VCU from taking consumers’ tax refunds to satisfy medical debts unless the health systems have determined that patients aren’t eligible for their financial assistance programs or Medicaid, the state-federal health insurance program for low-income people.

UVA screens people routinely for financial assistance and Medicaid eligibility, according to spokesperson Eric Swensen. Every year, the health system helps roughly 3,500 people qualify for Medicaid or Family Access to Medical Insurance Security, a program for children whose families earn too much for regular Medicaid, he said.

If someone has an overdue bill with UVA, the health system turns to the refund setoff program as a last resort after all other options, including establishing interest-free payment plans, have been exhausted, Swensen said. In 2019, UVA received $4 million from tax refunds for delinquent medical debt, according to Swensen. Virginia Commonwealth University Medical Center collected approximately $7.7 million through the debt setoff program in 2019, according to spokesperson Laura Rossacher.

Collins said that she and her husband knew nothing about their debt until they got their smaller-than-expected “tax relief refund” last fall, along with a notice directing them to contact UVA if they had questions. (Under a 2019 state law, Virginia taxpayers were eligible to receive a one-time tax relief refund of up to $110 for individuals and $220 for married couples who file their taxes jointly.)

She said the couple had received state tax refunds in the years since this care was provided.

Swensen said that, in general, once a patient’s outstanding balance is sent to the state’s setoff program, “we are required to resubmit that balance to the state database each year until the patient pays their outstanding balance or the outstanding balance is satisfied through the debt setoff program.”

“If a patient had previous tax refunds that were not assessed, we are unsure why this happened,” he said.

A patient financial services representative at UVA told Collins the health system had sent billing statements, as well as final notices informing the couple that their accounts were being referred to collections. UVA also said it had notified them that the accounts would be reported to the state Department of Taxation.

Collins said that they never received those notices but that after their tax refund was withheld, they did receive several notices.

In October and November, Collins and Blow received letters from both UVA and the tax department informing them of four setoff claims totaling $220, in the amounts of $67.39, $42.61, $78.63 and $31.37. Two of the dollar amounts matched up with the itemized bills from UVA, but two did not. If they wanted to contest the claims, the notices said, they could request a hearing with UVA. Collins did so.

Subsequently, the UVA patient services rep said that as a “one-time courtesy” the health system would release the hold on the $110 from their refund, Collins recounted.

In late May, Collins and Blow received a “patient refund card” worth $31.37 from UVA for their son’s care. But the odyssey continues. The following week, the state tax department informed them it had once again withheld money from their tax refund — $5.79 this time — to satisfy an unpaid UVA debt.

Collins said she planned to call UVA to ask about the refund offset, but she assumes it’s also related to her son’s care nearly 20 years ago.

How much longer will this go on, Collins wonders. Do Collins and Blow still owe money to UVA? If they do owe money, how much do they owe? And why did it take so long for UVA to come looking for it?

Collins said she has asked UVA those questions but hasn’t gotten clear answers. Her frustration is through the roof.

“You know what I think government agencies and state hospitals are good at?” Collins asked. “Obfuscation.”

—————–

By: Michelle Andrews
Title: Ghost Bill: UVA Siphons Couple’s Tax Refund To Pay 20-Year-Old Medical Debt
Sourced From: khn.org/news/ghost-bill-uva-siphons-couples-tax-refund-to-pay-20-year-old-medical-debt/
Published Date: Wed, 24 Jun 2020 09:00:14 +0000

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Ends-of-the-World Every Year Since 1970

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3 years ago

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August 14, 2020

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There always has been and always will be a reason not to invest or not to stay invested. This is all the mainstream media reports to us. Below you will find a list of some of the worst global events each year since 1970. I have some commentary to follow.

1970: War: US troops invade Cambodia.
1971: Civil Unrest: Anti-war militants march on Washington.
1972: Political: Start of Watergate Scandal.
1973: Economic: OPEC raises oil prices in response to US involvement abroad.
1974: Political: Nixon resigns as President of the United States.
1975: Political: Multiple assassination attempts on President Ford.
1976: World: Ebola virus.
1977: Political: Government shutdowns.
1978: Market: U.S. Dollar plunges to record low against many European currencies.
1979: World: Iranian militants seize the U.S. embassy in Teheran and hold hostages.
1980: Economic: Inflation spiked to a high of 14.76%.
1981: Political: President Reagan assassination attempt.
1982: Economic: Recession continues in the U.S. with nationwide unemployment of 10.8%.
1983: Economic: Unemployment in the U.S. reaches 12 million.
1984: Economic: 70 U.S. banks fail during the year.
1985: World: Multiple airplane hijackings around the world.
1986: World: Chernobyl Nuclear Power Station explodes.
1987: Market: DOW drops by 22.6% on October 22.
1988: Environment: Awareness of global warming and the greenhouse effect grows.
1989: Environment: Exxon Valdez dumps 11 million gallons of crude oil into Prince William Sound.
1990: World: Persian Gulf War starts.
1991: World: Mass shooting in Killeen, TX.
1992: Human Rights: Los Angeles riots following the death of Rodney King.
1993: Terrorism: World Trade Center bombing.
1994: World: Mass genocide in Rwanda.
1995: Terrorism: Oklahoma City bombing.
1996: Terrorism: Olympic Park bombing.
1997: World: Bird flu.
1998: World: Multiple U.S. embassy bombings.
1999: World: Columbine shooting.
2000: Economic: Start of the Dotcom Market Crash.
2001: Terrorism: Terrorist Attacks in NYC, DC & PA.
2002: Economic: Nasdaq bottomed after a 76.81% drop.
2003: World: The U.S. invades Iraq.
2004: World: The U.S. launches an attack on Falluja.
2005: World: Hurricane Katrina
2006: World: Bird flu.
2007: Economic: Start of the Great Recession.
2008: Economic: Great Recession continues.
2009: Economic: S&P bottomed after a 56.8% drop.
2010: Market: Flash crash.
2011: Market: Occupy Wall Street and S&P downgrades U.S. Debt.
2012: Political: Fiscal cliff.
2013: Political: Taper tantrum.
2014: World: Ebola virus.
2015: World: Multiple mass shootings.
2016: Political: Divided U.S. Presidential election.
2017: World: North Korea testing nuclear weapons.
2018: Economic: U.S. & China trade war.
2019: Economic: Student loan debt reaches an all-time high of $1.4 trillion.
2020: World: COVID-19.

While many of these events were undoubtedly terrible (and there are certainly others not named here that were worse), most of these were broadcast as end-of-the-world events for the stock market. Despite that attention, it is worth noting that these were, for the most part, one-time events. In other words, most faded into the newspapers of history. We moved on.

Obviously, some caused monumental shifts in the way the world works. Just think about how much air travel continues to be impacted by the events of 9/11. But, outside of the resulting inconveniences (if we want to call safety protocols inconveniences) associated with air travel, flying is safer than ever before.

Take a look at just about any of the events and you will find there are many that people will hardly remember. My point here isn’t that these events are to be ignored or that they were easy to stomach at the time, but that they have become a distant memory.

I want to also make the point that we should expect these types of negative events. As investors, we know these types of crises, economic catastrophes, and global phenomena are going to happen.

But in almost all cases, here is what we can say in the next breath – this too shall pass.

Will there be legal, humanitarian, economic, or some other aid required as a result of these events? Almost certainly the answer is yes, but that doesn’t mean it they won’t eventually fade into history.

Lastly, what’s worth noting is how the market has performed over these last 50 years despite the continual advertisements of the world crashing down around us. On January 2, 1970, the Dow Jones stood at 809 and the S&P at 90 -> those are not typos. These same indexes have grown (not including dividends) to 26,387 and 3,232 respectively. Amazing, no?

Perhaps what gets overlooked more than anything else is what separates the above one-time negative events from the positive stories that go largely ignored over our lifetimes. And that is a story worth telling. See the companion post below:

Unheralded Positive Events Every Year Since 1970

Stay the Course,
Ashby

Retirement Field Guide Mission:

“To help 10 million people make better retirement decisions.”

If you would like to join us in achieving our mission, I hope you will consider sharing our site if you have found it helpful in your own retirement planning.

This post is not advice. Please see additional disclaimers.

The post Ends-of-the-World Every Year Since 1970 appeared first on Retirement Field Guide.

—————–

By: Ashby Daniels, CFP®
Title: Ends-of-the-World Every Year Since 1970
Sourced From: retirementfieldguide.com/ends-of-the-world-every-year-since-1970/?utm_source=rss&utm_medium=rss&utm_campaign=ends-of-the-world-every-year-since-1970
Published Date: Tue, 04 Aug 2020 13:26:19 +0000

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Wildfire prone property insurance bill in California due for hearing

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3 years ago

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August 14, 2020

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The post Wildfire prone property insurance bill in California due for hearing appeared first on Live Insurance News.

The bill is expected to be heard in upcoming weeks as opposing sites prepare for major battle.

A new California bill, the outcomes of which will have a lot to say about coverage for wildfire prone property in the state, will soon be headed for hearing. The hearing is expected to be a heated one as strong opposing opinions have the opportunity to be voiced.

Opponents of this bill are calling it a direct attack on consumer protections in insurance.

That said, proponents of the bill claim it is the best method for making coverage available to wildfire prone property in California. The bill in question is Assembly Bill 2167. It was written by Assemblyperson Tom Daly (D-Anaheim). If it passes,it will create the Insurance Market Action Plan (IMAP) program. The IMAP program is meant to protect residential properties.

So far, AB 2167 has progressed quickly, when taking into consideration that a chunk of the legislature has been considerably restricted by pandemic crisis precautions. It was first presented in early June and backers have been saying that it was brought forward in good timing and that it has all the momentum it needs to be passed.

That said, AB 2167 has not been without opposition. In fact, it has faced considerable opposition, having been called an attack on Proposition 103, insurance consumer protection law. California Insurance Commissioner Ricardo Lara lobbed that argument at it, calling it an “insurance industry wish list, with nothing to help consumers,” and Consumer Watchdog, whose founder, Harvey Rosenfeld, was the original author of Proposition 103.

The insurance industry strongly supports the bill, saying it will help wildfire prone property coverage.

Insurance organizations such as the American Property Casualty Insurance Association and the Personal Insurance Federation both support AB 2167. The bill also has the support of the California Association of Counties (CSAC), as well as Fire Safe Councils of California, and the CalFIRE union.

The Consumer Federation of America, another watchdog organization, has predicted that if AB 2167 passes, it will cause 40 percent increases in insurance rates. On the other hand, insurance groups claim that the bill offers owners of wildfire prone property a greater opportunity for choice and competition among insurance companies based on coverage and premiums while avoiding the limitations and high costs associated with FAIR Plan coverage.

The post Wildfire prone property insurance bill in California due for hearing appeared first on Live Insurance News.

—————–

By: Marc
Title: Wildfire prone property insurance bill in California due for hearing
Sourced From: www.liveinsurancenews.com/wildfire-prone-property-insurance-bill-in-california-due-for-hearing/8549884/
Published Date: Fri, 14 Aug 2020 09:00:14 +0000

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Is this the last hurrah for bonds?

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3 years ago

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August 13, 2020

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Recently, I have written quite a bit about the long-term return expectations for investing in bonds. See here, here, here and here.

Spoiler alert: I don’t think it’s good.

But long-term bonds this year have been quite an amazing story as the COVID pandemic has caused the Fed to take historically monumental actions. As a result, we’ve watched long-term Treasuries tear the roof off the market. For instance, a 20+ Year Treasury Bond ETF (name withheld for compliance purposes) is up more than 31% YTD as of July 31st.

That is insane!

But there is a good reason for this increase shown below.

The red circle shows a decrease in the 30-year Treasury rate of almost 40% over a span of six months. That’s practically unprecedented with only two periods (2008 and 1981-1982) having similar declines over such short periods.

But this begs the question: Is this the last hurrah for bonds as a driver of any meaningful return? Below is the 30-Year Treasury rate over the last 40+ years.

For what it’s worth, people have been forecasting the end of the bond bull market since 2012 (maybe even earlier) and yet it has continued despite those predictions. But at some point, the bond party will come to an end.

The Fed has been clear that they are going to keep rates stable until at least 2022 which means this may not change for a little while longer. Or in the near term, I could even see the high returns continuing if we experience pandemic economic shutdown round two.

But, I can’t see a world where this is the case for much longer than that – most importantly over the span of a 30-year retirement.

The official end of the bond bull market depends on a recovery from the pandemic economy as well as a few other factors causing rates to rise. But when they do, it seems likely to me that this may be the last great hurrah for bonds for quite some time.

The question is when to get off that train and that undoubtedly requires a personal answer.

Stay the Course,
Ashby

Retirement Field Guide Mission:

“To help 10 million people make better retirement decisions.”

If you would like to join us in achieving our mission, I hope you will consider sharing our site if you have found it helpful in your own retirement planning.

This post is not advice. Please see additional disclaimers.

The post Is this the last hurrah for bonds? appeared first on Retirement Field Guide.

—————–

By: Ashby Daniels, CFP®
Title: Is this the last hurrah for bonds?
Sourced From: retirementfieldguide.com/is-this-the-last-hurrah-for-bonds/?utm_source=rss&utm_medium=rss&utm_campaign=is-this-the-last-hurrah-for-bonds
Published Date: Wed, 12 Aug 2020 13:47:16 +0000

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