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Hospitals in West Virginia are seizing bank accounts, garnishing wages over unpaid debt during ongoing COVID-19 pandemic

A Preston County judge has ruled WVU Hospitals seizure of a bank account during the pandemic unconstitutional

  • 13 min to read
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Tracy Fowler is one of many West Virginians seeing her wages garnished during a pandemic due to unpaid medical debts.

MORGANTOWN — It was just a normal day for Preston County resident Cheri Long — or as normal as a day gets during a global pandemic.

Long, who works as a nurse at an assisted living facility, was at the store purchasing groceries for her and her family when her debit card was declined. She knew she had money in her account, so she began to look into what was causing her payment to be rejected. That’s when she discovered there was a lock on her bank account by WVU Hospitals due to unpaid medical debt.

This left Long and her husband Seth — who were otherwise in a situation to attempt to tackle the pandemic safely without incurring new debts — falling behind on their house payments and utilities, and struggling to provide themselves and their children with essential supplies to survive. At points, she had to bring home food from her workplace and ask for gas money from her co-workers.

“I can’t begin to explain the hurt and embarrassment I felt by the way I was treated when I called, begging in desperation to help me or lead me in the right direction so I could provide for my children while working as a nurse on the front lines,” said Cheri Long. I couldn’t even afford to purchase fabric to make myself a mask due to the shortage of personal protective equipment.”

WVU Hospitals, more commonly known as J.W. Ruby Memorial Hospital, is a 690-bed academic medical center which is located in Morgantown. It serves as the flagship hospital and the largest facility for WVU Health Systems, a not-for-profit corporation and one of West Virginia’s largest employers — the system has more than 1,000 active medical staff members and 1,450 beds.

WVU Medicine, the brand that WVU Health Systems operates under, claims on its website that its mission is “[t]o improve the health of West Virginians and all we serve . . .” and that its vision is [t]o transform lives and eliminate health disparities through a national recognized patient-centered system of care.”

Meanwhile, since the COVID-19 health crisis struck West Virginia, it took 19 days to record 324 cases and three deaths, with a positive test percent of 3.6 percent. In the 14 days since then, the state has recorded well over 550 additional cases and 17 deaths, and the positive test percentage has jumped to 4.1 percent. At the same time, 90,000 unemployment claims were filed in West Virginia in March, the month of the pandemic outbreak and ensuing economic shutdown in the state — which equates to five percent of the state’s total population. In a normal month, West Virginia sees about 5,000 claims.

So when Jennifer Wagner, an attorney with Mountain State Justice in Morgantown, spoke with the Long family and found out that a non-profit, academic hospital was seizing bank accounts during times of record unemployment and unprecedented health risks, she immediately knew action had to be taken — especially considering the size and relevance of the WVU Health System in the state.

Jen W

Jennifer Wagner, attorney with Mountain State Justice in Morgantown.

“I wouldn’t be that surprised if a junk debt buyer or a small outfit was continuing debt collection activities, but the fact that a tax-exempt, non-profit, charitable organization with a huge budget and a mission of helping people was engaging in these types of tactics during this time was pretty shocking to me, to tell the truth,” Wagner said

“They’re seizing poor peoples funds at a time when everybody in this economy is struggling, but especially people who live paycheck-to-paycheck like the Long family does...they were stuck in a position where they needed that money to eat, for [Cheri Long] to get to work and maintain her job, to pay for their housing costs. And WVU Hospitals is taking advantage of this time to seize their funds.”

Other residents in North Central West Virginia, such as Will Stewart of Preston County, have also used WVU Health Systems for care and have acquired substantial medical debts that they struggle to pay off while sustainably living.

Stewart battled Lyme Disease for over 10 years, starting in 2002 and lasting well into the 2010s. He incurred a lot of debt over the years, and then last fall, he was hospitalized by a string of heart attacks, which sent him further in debt.

After recovering from the heart attacks, the WVU Health System began seeking the debt and passed it off to their collection agency last winter when Stewart, who is on disability, couldn’t pay.

Now, he has continued to receive calls through the ongoing crisis from the debt collection agency, who he claims have still harassed him since the onset of the pandemic. He agrees with Wagner that a hospital that so many put their trust in should not be putting those in debt at further risk during this dangerous and uncertain time.

He also knows from experience that his peers living in rural West Virginia are much less likely to properly take care of themselves medically during the ongoing crisis if they know that hospitals and their debt collectors are harassing people for money. He understands the mindset well, as someone who has lived in such an environment for a long time.

“WVU is a teaching hospital, and they should be doing better...they should not be quite so aggressive. I get that you need to get your money, I get that, but right now my wife is only working from home, and the money is really tight right now. Having these people calling isn’t exactly good for the stress levels,” Stewart said.

“And people aren’t gonna go to the hospital if they’re worried people are going to start putting the squeeze on them. They’re not going to go get checked, they’re not going to go get tested, they’re just not going to do it. People who don’t seek tests and treatment have a much worse chance of getting out of it unscathed.”

Wagner said the more she learned about the case and the more that she dealt with the Longs, the more she believed the hospital’s actions were questionable.

“As soon as we were able, we spoke to Ms. Long and gathered together the documents to verify what she was telling us and to go forward to take what action we needed to protect them. The documents she gave us actually showed that things were worse than she had even told us,” Wagner said.

“Not only did they start the debt collection activities after the state of emergency, but after her appropriately exempt funds were exempting and the seizure of them was lifted, and the debt collector and WVU hospitals went back to court and put a hold back on those funds during the state of emergency when they knew no hearings would be held.”

Wagner also quickly realized upon her discussions with Cheri Long that on certain levels, the hospital and its chosen debt collectors were violating both the state and federal constitution.

“From a legal perspective, one of our basic constitutional rights is the right to due process of law before seizure of personal property. So the fact that their property was being seized during a period of time when there is no access to the courts that handle this and no due process is available is really disturbing because it really undermines a basic fundamental right,” Wagner said.

“In this case, the funds in the account were all from Mrs. Long’s wages, and Mr. Long is out of work as a coal miner. The debt is Mr. Long’s, but they’re seizing Mrs. Long’s wages, which makes it even more egregious because they’re essentially, without any notice or due process, seizing the wages of a third-party to pay the debts of someone else. Legally, that’s highly problematic.”

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The Long family and Wagner filed a lawsuit against WVU Hospitals, and on April 15, Preston County Judge Steven L. Shaffer issued an emergency order stopping seizure of both their bank account and stimulus funds.

Shaffer explained in the order, which Wagner provided to the Times West Virginian and can be read in its entirety below, that “seizure of personal property during the court closure and stay at home order and related state of emergency . . . violates due process of law.” The Judge also stated, “seizure of the Federal CARES Act payments violates Plaintiffs’ right to life, liberty, and property,” under the due process clause of the West Virginia Constitution.

And while Wagner was excited to secure the victory for her client, she still is worried about the actions of the WVU Health System at this time and, on behalf of her firm, called upon them to cease the “illegal and unconstitutional conduct” immediately.

“We are so glad that the Longs finally have access to the money that is rightfully theirs,” Wagner said.

“We are extremely alarmed, however, that WVU Hospitals continues to collect on debts, including through asset seizure, during this crisis. WVU Hospitals does not pay taxes but is trying to line its pockets with taxpayer funds intended to get West Virginians through this crisis.”

And just down the interstate from the city where WVU Hospitals operates, citizens in Marion County are finding that the WVU Health System isn’t the only healthcare provider willing to attempt to settle debts via securing an individual’s funds during the pandemic — even if the hospital they owed their debt to is no longer operating.

Fairmont Regional Medical Center was the only local hospital serving Marion County’s population of over 50,000 before parent company Alecto Healthcare announced in early 2020 they would be closing the hospital in 60 days. In March, just halfway through the 60 day timeline and amidst the pandemic outbreak, Alecto decided to speed up the process, halting operations and transferring patients within days.

After the hospital’s closure, Fairmont resident Tracy Fowler noticed her latest paycheck appeared to be smaller than usual, despite her working the same amount of hours as always. Upon investigation, she found a notice via her workplace ADP account that her pay had been garnished — she provided proof of the garnishment notice via email to the Times West Virginian.

“We hope this email finds you in good health. A payment in the amount of $85.59 has been deducted from your paycheck dated 04-17-2020, for a Writ of Garnishment. This payment will be sent to 200 W MAIN ST, STE B, BRIDGEPORT, WEST VIRGINIA, 26330-1749 via a/an ACH,” the notice stated.

The email continued with an update on Fowler’s current balance, before closing by informing her to contact Fairmont Regional Medical Center for any further questions regarding the validity of the debt. However, the hospital currently being shuttered makes it a bit hard, and beyond the mailing address, no information was provided to contact anyone with Alecto Healthcare or an affiliated debt collection agency.

When Fowler found the affidavit that was sent to the court, she discovered it listed a former address she hasn’t resided at for nearly a decade which was on file at the time the debt was initially incurred, so she didn’t receive any notice via mail that the debt was still owed or that it had been sent to collection. Though it’s worth noting that Fowler, who had continued to attend Fairmont Regional up until it’s closing, had updated her address to her current residence long ago.

“They had a way to get in touch with me, they didn’t want to. That’s what makes me mad. Back in March, which is when it shows they went to the court to get this, [the hospital] had my current address. That’s very unprofessional...you just can’t do that. I’m a single mom, and I missed two weeks of work without pay before this job because I had the flu. I’m trying to catch up, and this really hurt me,” she said.

“I go through all my bills, whether I can pay the bill or not. I even will call places and be like, I want to set up a payment arrangement, I know I owe you money, and they’re like, fine. No big deal. For them to do this, especially now — people are out of work. My daughter’s day care is closed. Come on, now.”

Another former patient at FRMC, who decided not to do a full interview or release her name, disclosed via Facebook that she received a garnishment notice from her employer in mid-March, stating that 20 percent of her wages would be garnished for a debt to the hospital. She was told by the debt collector’s lawyer that nothing could be done due to a judge having signed off, and that they plan to continue garnishing her wages rather than set up a direct payment plan.

{p dir=”ltr”}Wagner’s research shows that prior to the COVID-19 crisis, more than 40% of West Virginians had debts in collections and that the majority of these debts are for hospital and medical bills incurred for necessary care.

In an attempt to prevent further instances of such actions from hospitals Mountain State Justice joined with the ACLU-WV, the West Virginia Bankers’ Association, Community Bankers of West Virginia, and others last week to send a letter to Gov. Jim Justice and Chief Justice Tim Armstead of the Supreme Court of Appeals of West Virginia requesting swift action to protect individual stimulus payments, also known as federal pandemic survival funds, from seizure to pay old debts. Wagner has provided that letter in full and it can be read below.

The Governor’s office sent an official response to the letter saying while the concern was appreciated, it was out of the office’s purview to handle such matters and that the Governor would contact the state Supreme Court regarding their authority on the matter — and encouraged the letter-writers to do so as well. Wagner also emailed a copy of the Governor’s response which can be read below.

“Thank you for your letter concerning the issue of debt collection efforts for funds to be distributed to West Virginia citizens under the federal CARES Act. It is generally outside the scope of the Governor’s emergency powers to suspend debt collection efforts in the manner you have requested,” the response letter said.

Those who signed the letter have heard nothing back from Justice Armistead, who was sent the letter on the same day as Justice. Wagner spoke with lawyers at WVU Hospitals about whether or not they would continue such actions. And the response they provided to her — which was only oral, as the health care provider chose not to substantiate their claim to Wagner with any sort of statement in writing — was not encouraging.

“When I reached out to WVU hospital after the order was issued I was told that they were not going to take any different action in response to the order and that they did not have any particular policy related to the COVID-19 crisis,” she said.

“They would not talk about what they’re doing broadly, but that they would try to resolve something for my individual clients. One of the things they suggested was a payment plan, but there was no discussion of either dropping the debt or stopping any collection efforts against anyone else [during the crisis.] That’s of substantial concern to my clients as well as Mountain State Justice.”

On Monday, after the initial publication of this story, the Times West Virginian was able to contact Tony Condia, vice president of marketing at WVU Medicine, who shared via email a list of guidelines the not-for-profit gives third-party debt collectors it employs. The guidelines can be read in full below.

In response to reports that some agencies are taking an approach that appears to violate WVU Medicine’s requests to take a “soft approach” and to cease the filing of legal suits, Condia said such communication is good and let’s them know to reinforce guidelines with collectors. However, he stopped short of naming any specific repercussions these agencies would face for not abiding by guidelines, saying they will evaluate reports of such behavior and determine a path forward from there.

“We want to work with each individual to figure out a payment plan and what works best with them, and these were the directives we gave the companies we hire to do this on our behalf. I think that speaks volumes about the broader issue and how we’re approaching it,” Condia said.

“I think ultimately, the guidance, they’re out there working on our behalf, so the expectation we have is that they’ll be responsive to the guidance we give them.”

And while Wagner was able to secure a victory for the Long family via an emergency order, there are numerous others — including an additional client of Wagner’s — still fighting battles with healthcare providers while they struggle to survive adequately during a time of historic economic hardship and the largest health crisis in decades. And others who owe debts to hospitals, such as Stewart, now have another layer of uncertainty to add atop the mounting pile of it during a global pandemic — could it be them next?

“That terrifies me...fighting Lyme alone, Lyme is scary. I literally had hundreds of thousands of dollars in bills. It's scary just the thought that they can actually seize my bank account when I’m trying to do things like pay for electricity or heating, it terrifies the hell out of me. It isn’t right,” Stewart said.

“They’re supposed to be a teaching hospital, they’re supposed to be how things should be done. They get a lot of public funding for that, and it feels like they’re trying to attack individuals when they get a lot of public funding.”

Follow Joe Smith on Twitter @joesmithwrites

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