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Couple’s tax refund taken to pay for decades-old surprise medical bill

A “surprise” medical bill often arrives in the mail weeks or even months after a medical service – a charge you were not expecting.

In an extreme example, a Virginia couple received a notice about an unpaid medical bill 20 years later. And they learned their tax refund would pay for it.

Jane Collins and her husband, Anthony Blow, received their notice from the Virginia tax department that their state income tax refund had been reduced from $220 to $110 to pay an outstanding medical debt to the University of Virginia Medical Center.

Collins had no idea what the bill was for, so she contacted the University hospital. She was informed that the hospital asked the tax department to withhold the money for medical care their son received in 2001 and 2002.

“The amount is not the issue; it’s this whole idea that you can go after something that is so old,” Jane Collins told Kaiser Health News. “Maybe technically you are entitled to that money, but do you mean to tell me you can go into the deep recesses of your computer and now you’re going to take this?”

Collins believes she knows what the 2001 hospital visits were for, but does not have information on the 2002 charges. The computer printouts she received from the hospital list service codes and billed charges, but do not describe why her son was hospitalized.

“I’m utterly confused by all of this,” said Collins, whose family is covered by the same employer plan they had then. “Eighteen years later, I don’t remember disputing anything about the bills.”

In 2018, Virginia collected $68 million in individual debts through a debt-collection program. This amount includes medical bills and other types of debt owed to state and local government agencies and state courts, among others.

“This gives a whole new meaning to surprise medical bills,” Mark Rukavina, business development manager at Community Catalyst, a consumer advocacy organization, told Kaiser Health News. “Digging up a bill that’s 20 years old and informing someone that they owe it by attaching their tax refund is not good policy.”

Do you think a hospital should be able to take part of your tax refund to pay for a medical bill decades later? Has it happened to you? Share your voice.