Judge Rules in Favor of Plaintiffs in Suit Against Hospital Placing Accounts with State for Collection

A state court judge in Kentucky has ruled in favor of plaintiffs who sued the University of Kentucky for allegedly violating their right to due process by using the state’s Department of Revenue to collect on unpaid medical debts.

A copy of the ruling, in the case of Long et al. v. University of Kentucky et al. can be accessed by clicking here.

UK Healthcare is the only healthcare provider in the state of Kentucky that can tap the state’s Department of Revenue to help collect on unpaid medical debts. The suit accuses the healthcare provider of having the Department of Revenue garnish wages and seize assets without filing suit against them, which is what most healthcare providers must do to recover unpaid debts. UK Healthcare does not alert patients that their debt has been referred to the state prior to doing so, according to the complaint. The Department of Revenue does not allow individuals to dispute the existence or the amount of the debt, the plaintiffs allege. It also automatically adds a 25% fee plus interest on any debt referred to it by UK Healthcare.

The Revenue Department has reportedly collected $76 million on behalf of the hospital network since 2009.

Following the filing of the lawsuit and reports about the garnishment process being published, the Department of Revenue updated its website to announce it was no longer collecting debt for the University of Kentucky and the state legislature enacted a measure that bans the department from collection consumer medical debt.

The state laws that the university was using as the basis for it sending accounts to the Department of Revenue for collection were not intended for that purpose and do not allow the university to refer those accounts, ruled Judge Thomas D. Wingate of the Franklin County (Ky.) Circuit Court.

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