Hospitals cure bill ills with liens
Notice in mail surprises some patients
West Volusia edition
Tripping on the rug in his Port Orange home sent Glenn Hibbs on a financial odyssey he wishes he’d never been forced to take.
He broke his shoulder and before it was put back together, Halifax Medical Center had a $26,000 claim — a lien — on Hibbs’ home. The hospital insisted he sign financial responsibility forms before being admitted for treatment.
“I signed it with a broken shoulder,” said Hibbs, 50, who has no health insurance. “They told me I had to sign or there would be no surgery.”
Increasingly, three local hospitals — Halifax Medical Center, Florida Hospital DeLand and Florida Hospital Fish Memorial — are recording liens against patients with the Volusia County Clerk of Court when there’s been an accident, even when the patient has health insurance.
Since 1999, the number of liens Halifax has filed has more than quadrupled to 2,159 liens filed in 2005. And the stakes have skyrocketed: In September, Halifax Medical Center, the area’s largest hospital, filed $5.2 million in liens compared to the $840,469 in liens filed in September 1999.
At Florida Hospital DeLand, 14 liens were filed in 2001 — the first full year the West Volusia Division of the Adventist Health System operated the hospital — compared to the 349 that were filed in 2005. At Florida Hospital Fish Memorial in Orange City, no liens were filed in 2001, compared to the 125 filed last year. It’s part of a trend, nationwide.
It’s not because the patients haven’t paid or are ignoring notices — these liens are filed automatically, often before the patient leaves the hospital.
Hospital officials say — but some attorneys and property title closers disagree — the vast majority of these liens are not against the person or their property, but against the court or insurance settlement stemming from the accident that caused the hospitalization. The liens, which are allowed by statute in 21 of Florida’s 67 counties, including Volusia, help protect the hospital — and, in Halifax’s case, property taxpayers, hospital administrators say.
“We file liens to make sure that the person doesn’t take the insurance money without passing it to the hospital,” said Harry Reese, chief financial officer for the Halifax Community Health System.
Still, John Reynolds of DeLand said he was stunned to come home from his 16-day hospital stay after a motorcycle crash and discover notice of a registered letter from Halifax waiting in his stack of unopened mail. Medical bills aren’t covered in his motorcycle insurance, he said, so he’s waiting to see how the $122,424.55 hospital bill will be resolved with his health insurance.
“I’m in limbo,” said Reynolds, 52, who worked as a heavy-machine operator before he started receiving Social Security disability years ago.
Similarly, the Hepsworths of Deltona are not only coping with the Sept. 23 death of daughter Krystle Accardi, 14, in a car crash. They also have a lien of more than $92,000 against them from the hospital, resulting from her hospital stay of a little more than 24 hours.
“I don’t know if they can do that,” said Douglas Hepsworth, Krystle’s stepfather, about the lien. They are now waiting to see how much their health insurance will cover. “I think it’s a very questionable area that they are going into there.”
A 1953 legislative act enabled Volusia County hospitals to impose liens before the patient has a chance to pay. Florida Hospital West Volusia Division spokeswoman Stefanie Macfarlane said the number of liens that Florida Hospital DeLand and Fish Memorial are increasing as reimbursement for hospital services has become more difficult.
At Halifax Medical Center, Reese attributed the rise in the number of liens to a change in policy that occurred in November 2000 that meant liens were filed in the cases of all accidents, not just auto accidents. At the same time, the hospital started filing amended liens once the patient accumulated another $25,000 in charges after the initial $10,000.
A Boston-based health-care advocacy nonprofit organization says reports of the use of liens are increasing around the country.
“All hospitals are working to improve their revenue cycle management, which means they are being much more aggressive about collecting bills,” said Betsy Stoll, legal director at Community Catalyst, in an interview from her Boston office. “I think it’s a symptom of the growing number of people without insurance and more of a push onto the person who’s insured.”
Florida law prevents creditors from seizing homesteaded property. And, unless hospitals seek a judgment on outstanding liens, they don’t affect the debtor’s credit or property, officials from local hospitals say. But on this point, attorneys and property title closers disagree.
Debbi Kelley, marketing director and closer at Florida Venture Title, said medical liens are regarded much like outstanding child-support payments — and must be paid before the named person call sell property or refinance it.
“I have run across them in the past, and, for the most part, we have paid them at closing,” Kelley said.
But Daytona Beach Attorney Walter J. Snell said these liens in accidents essentially are uncollected bills — until the hospital decides to seek a judgment.
“The only time they sue is when they know a person owns property,” he said.
County and hospital records show that the number of lien releases is not keeping pace with the number of liens Halifax Medical Center is filing. But Arvin Lewis, vice president for patient business and financial services, said the hospital rarely files for judgment on its liens. The number of judgments the hospital sought has decreased from 175 in 2002 to 51 this year, he said.
“We truly don’t want to file claims against our patients in court,” he said.
Meanwhile, Hibbs’ shoulder has healed from the injury in February, but he’s still shocked at the treatment he received — which, he says, required him and his partner to make a $2,976 payment up front, even before he was diagnosed as needing surgery.
Hibbs, who has a $12-an-hour job at a real estate company, said he hasn’t begun to pay off the lien as he’s still juggling bills from anesthesiology and emergency room services.
The idea that Halifax Medical Center owns a piece of his house is a stinging reminder of his injury.
“We weren’t even given the option of making payments,” he said.