Jan 032013

By Joseph Neff – jneff@newsobserver.com

After opening his bill from UNC Health Care, Charlie Caserta quickly decided that he wouldn’t pay. Caserta had paid a $50 co-pay for his visit to a liver specialist, and was hopping mad to see that UNC was trying to collect a $152 facility fee.

“Just for walking into the hospital,” Caserta said.

Caserta, a 56-year-old Raleigh businessman, paid all but the amount of the facility fee. When a collection agency called in March, he had his answer ready.

“Please sue me, I told them,” Caserta said in an interview. “I’d be happy to fight this in court.”

He never got the chance. UNC Health Care collected by pulling the money out of Caserta’s state tax refund.

It used a little-known law, the Set Off Debt Collection Act, that allows state and local agencies to collect debts by seizing state tax returns and lottery winnings.

The law has been good to UNC Health Care. Last year, UNC Hospitals collected $5.7 million, while UNC Physicians and Associates collected $2 million. Together, that accounted for 11 percent of the $72 million of set off debt collected for all state and local agencies that year. The local agency that collected the most in 2011 was Mecklenburg County, which received $2.6 million.

“It is a lot of money,” said Robin Thompson, a vice-president at UNC Physicians and Associates. “It is a useful tool.”

Chris McClaughlin, an expert on local taxation at the Institute of Government in Chapel Hill, called the law a hidden gem that allows government agencies to collect debts of $50 or more: unpaid property taxes, water and sewer bills, ambulance fees or any other assessment.

Karen McCall, spokeswoman for UNC Health Care, acknowledged that UNC gets a lot of complaints from patients about the process.

“Many patients will contact us on this,” she said. “We do it because we are required to.”

State law requires public agencies to submit a list of all debtors to the N.C. Department of Revenue. UNC is the only hospital that can use the law. One other physician’s plan, at the East Carolina University School of Medicine, uses it, too.

UNC Health Care first tries to collect debts on its own by sending out at least three monthly bills.

If the patient hasn’t paid, the hospital will send the bill both to a collection agency and to the Department of Revenue. Using the revenue department is a better deal for the hospital. Depending on the contract, a collection agency will pocket 10 to 25 percent of the money recovered, while the state agency charges five dollars per case.

And while many patients are familiar with letters and robocalls from collection agencies, the Set Off Collection is silent: The debtor learns that the tax refund has been attached after the fact.

Collecting old debts

In 2010, the General Assembly changed the application of the law from “individuals” to “persons.” That change means public agencies can collect unpaid property taxes and fees from corporations. McClaughlin said he doesn’t believe that any agencies have begun collecting from businesses.

In 2009, Dorothy Thompson of Burlington went to cash in a winning lottery ticket. She was surprised when lottery officials withheld $575.99 from her winning ticket for hospital bills from 1995 and 1996.

Thompson filed a complaint with the Attorney General’s office, saying she was covered by Medicaid at the time and hadn’t received a bill during the 13 years since her treatment.

UNC Health Care checked its files and found that Thompson had been on Medicaid for part of this time, and refunded her $224.

It’s not unusual for UNC Health Care to collect debt 10 or more years older.

“There is no statute of limitations on debt,” said Robin Thompson, the UNC vice-president. The Thompsons are not related.

Caserta said that when he went to his doctor’s appointment at UNC, he expected to pay for a doctor’s office visit. But UNC billed him as an outpatient, which allows the hospital to charge a facility fee for hospital infrastructure.

He said he has friends who live paycheck to paycheck, and found it unfair for the hospital to seize their tax refunds for medical bills. Financially well-off after selling a startup, Caserta could easily afford the fee but wanted to fight it on principle.

“I really wanted them to sue me on this,” he said.

Neff: 919-829-4516
Read more here: http://www.newsobserver.com/2013/01/02/2579887/in-collecting-bills-unc-health.html#storylink=cpy

via In collecting bills, UNC Health Care has powerful friends – Health/Science – NewsObserver.com.


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