Second suit challenges UK’s use of state to collect medical debt

By Al Cross Published June 8, 2020 CORONAVIRUS, HEALTH BUSINESS

The University of Kentucky should have to go to court to collect medical debts, not use the state tax agency as a collection agency, says a federal lawsuit filed against UK and state officials June 5.

“The suit argues that UK HealthCare and the state Department of Revenue are violating the 14th Amendment and the due process rights of former patients struggling to pay off hospital debts by demanding payments and garnishing their wages without going to court first,” Rick Childress reports for the Lexington Herald-Leader.

The five plaintiffs ask a federal judge to make the case a class action on behalf of everyone who has had to pay UK through the Revenue Department. They also want a temporary injunction against such collections.

Another federal lawsuit “challenges the legality of UK using a state agency to collect debt in the first place,” Childress notes. “Former patient Amelia Long and four others are the plaintiffs in that class-action lawsuit against Cox and Allison Ball, the state treasurer. According to that suit, UK HealthCare is the only hospital in the state which collects debts via the Revenue Department.”

UK spokesman Jay Blanton said “Our policies mandate that a patient be contacted several times before a bill is forwarded to the state, a practice established by law. Moreover, in addition to multiple attempts to reach a patient, we provide counseling, and mediation with a third party if an agreement about a debt cannot be reached.”

The Revenue Department is not collecting during the covid-19 pandemic, under order of Gov. Andy Beshear, but the press release announcing the lawsuit said the agency is still sending threatening letters to debtors, Childress reports: “When collections resume, people who may have lost jobs and health insurance because of the pandemic could be affected.”

Ben Carter of Lexington, one of the attorneys who filed the suit, told Childress that debt collectors usually have to sue before collecting, giving debtors a chance to defend themselves, but “That never happens in any of these cases,” he said. “There’s no incentive for UK HealthCare to get these bills right, to negotiate in good faith with our clients and their customers. They get to refer it to a debt collection agency — that’s like debt collection on steroids.”

Blanton said collecting all debts helps “spread the cost of care an ensure affordable access to more people who need such care the most.”