Senate Bill Aims to Remedy Healthcare Debt Collection Abuses

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Collecting medical debts will get more difficult, should Congress enact laws proposed by Sen. Al Franken (D-Minn.).

Late last month Sen. Franken fulfilled a promise and submitted a bill to Congress proposing to strengthen the Fair Debt Collection Practices Act. The new bill — Senate 3350, “End Debt Collector Abuse Act of 2012″ — is nearly identical to an earlier bill Sen. Franken introduced except for the sections related to medical debt. That bill died in committee and was never enacted.

In his proposed changes to the Fair Debt Collection Practices Act, Franken seeks to have medical debt treated differently from other debt, especially as it applies to collection practices.

[To read how Sen. Franken’s bill would change the FDCPA, download this PDF]

According to the senator’s bill, “Medical debt is unique among types of consumer debt” because “consumers seek out health care services out of medical need, not choice” and they typically do not know how much healthcare services cost before they receive them. Also, “overly aggressive medical debt collection can discourage consumers from seeking needed healthcare services, with dire financial, physical and public health consequences for themselves and their communities.”

Under the bill, communicating with a patient while they are receiving critical medical services (such as in an emergency room or intensive care unit) about a medical debt shall be considered harassment or abuse and therefore a violation of law, unless the patient requests that information. According to the Minnesota Attorney General, this was a practice at Fairview Hospital.

The bill also adds to the section of “Unfair Practices” two provisions: Withholding or threatening to withhold emergency medical services until a debt is paid, and using protected patient information to collect a debt. It also expands upon recent rules proposed by the U.S. Treasury Department regarding making available information to patients regarding availability of financial assistance programs. In Sen. Franken’s bill, anyone seeking to collect a medical debt — be it from the provider or from a third-party collection agency — must inform the patient of financial assistance programs. The Treasury’s proposed regulations, which will be enforced by the IRS, will only apply to not-for-profit hospitals.

Sen. Franken, who has long been active in seeking legislation aimed at the credit and collection industries, became involved in medical debt collection practices following an investigation by the Minnesota attorney general into Minneapolis-based Fairview Health Services, a not-for-profit chain of seven hospitals and more than 40 clinics, and its contractual relationship with consultant Accretive Health, which allegedly integrated bill collectors into hospital admissions staff.

In May Sen. Franken conducted a Senate field hearing at the Minnesota state capitol to investigate attorney general Swanson’s claims, and at the end promised “to look into whether we can do more to strengthen our federal laws” regarding patient debt and collections practices.

At the end of June, Sen. Franken submitted two bills, the “End Debt Collector Abuse Act” and Senate 3351, “Protect Our Health Privacy Act,” which seeks to expand protections in the Health Information Technology Act (HITECH) to healthcare provider business associates, such as collection agencies.

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Posted in Medical Receivables, Patient Access, Patient Experience, Patient Financial Services, Revenue Integrity .

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  • avatar JESSE BRIXEY says:

    Would any of you that collect medical debt try to collect from someone in the ER or the ICU? I am thinking that is a pretty good reason to call back at another time, also the client I collect for would not approve of this practice. Just curious how the other half lives. :)

  • avatar Evan J. Albright says:

    Hello, Jesse,

    The section of the bill prohibiting contact in the ER and in other critical medical areas presumably is a reaction to the accusation by the Minn. AG that Fairview’s revenue cycle consultant/management company, Accretive, conducted such a practice. Accretive denies any wrongdoing.

    Here’s Accretive’s response to this very question as posed by Sen. Franken’s staff:

    Senator Franken’s staff asked, did Accretive employees request or discuss payment or attempt to collect past debts from patients while they received medical treatment or were interned at the hospital? Did they do so for emergency room patients? Patients in the neonatal intensive care unit (NICU)? Were Accretive employees directed to “collect at bedside post patient assessment,” as the report alleges?

    Accretive’s answer to all was “yes,” but within very strict guidelines, Accretive wrote. If patients were stable, if they did not suffer from a life-threatening illness such as heart conditions, if the medical staff had no objections, and if these conversations did not take place at registration, then hospital revenue cycle staff would meet with patients at bedside. “All conversations were optional,” Accretive wrote.

    “We believe that Revenue Cycle employees worked to communicate with patients with the greatest possible compassion, in a manner appropriate to the patient’s individual situation,” Accretive wrote. “The goal of these discussions was to help patients understand their cost of care and assist them (if necessary) in obtaining thirdparty coverage for that care. Accretive Health’s corporate code of conduct mandates that each employee commit to delivering services in an ethical, professional manner, and that all patients are treated with respect and dignity.”

    You can read the rest of Sen. Franken’s questions and Accretive’s responses here: http://www.insidearm.com/daily/debt-collection-news/debt-collection/accretive-responds-to-attorney-general-al-franken/

  • avatar Chip Shaner says:

    Any thoughts on what this section is supposed to do? Will debt collectors still be able to use patient information given to the providers to contact the debtor or further skip trace accounts? What about using PHI in litigation?

    [NEW SUBSECTION] (10) Using protected health information, as defined in regulations promulgated pursuant to section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d–25 note), except to the extent as is absolutely necessary to provide adequate information to consumers.

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