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Analysis

UVA Medical Center CFO Says Debt Collection Practices Are 'Not Unique' Following KHN Story

By Jack O'Brien  
   October 17, 2019

A month after Kaiser Health News reported on questionable debt collection practices at UVA Health, one of the system's financial leaders talks to HealthLeaders.

In early September, the University of Virginia Health System (UVA Health) was the subject of an investigative piece by Kaiser Health News (KHN) that examined the healthcare organization's debt collection practices.

Some have criticized the practices, including UVA President Jim Ryan calling the practices "aggressive" in public posts on social media.

The Charlottesville, Virginia­­–based system filed 36,000 lawsuits against patients for nearly $106 million in unpaid bills over six years ending in June 2018, according to KHN. The organization, according to the KHN article, also seized wages, placed liens on homes, and some patients reported filing for bankruptcy. 

Related: 'UVA Has Ruined Us': Health System Sues Thousands Of Patients, Seizing Paychecks And Claiming Homes

Related: Sen. Grassley Questions UVA Health On Findings From KHN Investigation

UVA Health is not the only healthcare organization to be questioned about debt collection practices in recent months. Other media reports have uncovered a similar pattern of lawsuits against patients, including at nearby VCU Health and Methodist Le Bonheur in Memphis.

Weeks before the initial story broke, UVA Health hired Mike Marquardt to take over as chief financial officer (CFO) of UVA Medical Center, the system's flagship hospital. Marquardt has been with the organization for nearly eight years, spending the past five as chief of staff to the executive vice president of health affairs at UVA Health System. While Douglas E. Lischke, CPA, MBA, CITP, CHFP, serves as CFO for the broader health system, Marquardt oversees hospital and clinical operations.

Marquardt recently told HealthLeaders that the issue of healthcare organizations pursuing patients over unpaid medical bills speaks to a larger industry-wide trend and is "not unique" to UVA Medical Center.

"First and foremost, we as a leadership team took a look at the situation and swiftly responded to better serve our patients," Marquardt says. "This is more than just a specific hospital or provider issue; I think it's a pervasive industry issue. At the end of the day, this empowers us as a system to look at what our values are."

Following the release of the KHN story, UVA Health committed to reexamining its financial assistance policies for low-income patients.

These policy changes were discussed at the same time that the medical center CEO announced that she was leaving and the governor who oversees the system's board called for greater accountability of debt collection processes.

Related: Virginia Governor And UVA Vow To Revamp Practice Of Suing Patients As CEO Exits

Marquardt says that the system has focused on providing quality care and access to healthcare services but stressed that access also includes patient affordability.

UVA's first immediate goal is to improve its "pricing strategy," says Marquardt.

"[Our pricing strategy] is what any healthcare system is looking at [in terms of] deductibles and more consumerism in healthcare," Marquardt says. "We need to update our practices around pricing and the transparency of pricing to our patients. Specifically, for me as the medical center CFO, and from an operational finance standpoint, this is a continued rally cry around hospitals and health systems truly understanding their cost of care."

He says that other changes are still "in the works," and added that the health system is working collaboratively with commercial payers and state lawmakers to serve its patient population.

One of those changes is UVA Health establishing an advisory council that will consist of internal and external patients. This will serve as a way to bring greater accountability to the organization and collect responses from the community at-large, he says. According to the KHN story, UVA Health sued about 100 patients annually who also happened to be UVA Health employees. Marquardt says that listening to patients, especially UVA Health's own employees, will provide the organization with helpful feedback to correct processes and respond in a timely manner. 

Related: UVA Health System Reviewing Financial Assistance Policies After Washington Post Article

In addition, UVA Health is relying on Lean management principles, Marquardt says, specifically as it relates to improving clinical quality and reassessing processes that serve the consumer. 

"As long as we continue to look at [whether] these [are] patient-centered, patient-friendly practices, that should be our industry's North Star," Marquardt says.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: Charlottesville, Virginia - Feb 19, 2017: The University of Virginia in Charlottesville, Virginia at night. Thomas Jefferson founded the University of Virginia in 1819. - Image / Editorial credit: Felix Lipov / Shutterstock.com


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