News & Resources

Collectors make profit in hospitals

Apr 27, 2012 Philip Burgess

A number of people who owe debt to various institutions in the United States ignore attempts at communication from debt collection agencies and fail to repay money they owe. This not only affects the overall economy because businesses may eventually start charging more to cover losses, but it can drive smaller companies out of business. In an attempt to collect overdue payments for firms, some debt recovery agents have been forced to contact owners of delinquent accounts wherever they can, including when the consumer is admitted to a hospital. Medical bills are among the most common payments that those in debt delay. Accretive Health, a Minnesota-based company, has been under fire lately for pursuing patients after being contracted by hospitals to provide help. According to The New York Times, delinquent payers who go back to the hospital are often asked to repay a debt before their account can incur more charges. The Charlotte Observer reported that it is often in a hospital's best interest to resort to hiring debt recovery services to collect a past due payment rather than pursuing the former patient themselves. It can be extremely time consuming if the medical center in question is large and sees a lot of patients. "The reason we outsource is that it is more costly to do it ourselves," Duke Hospital's chief financial officer Kenneth Morris told the source. Ken Perkins, an Absolute Collection representative, explained to the Charlotte Observer that the majority of collectors abide by the rules because they want their clients to retain loyal customers and complaints are relatively rare. Collection companies teach their agents to be professional and respectful, Perkins said, because money won't be recovered otherwise. Though there has been some controversy because of this practice, it may be a company's only chance to recover a debt from someone avoiding repaying what they owe. There are certain rules that collectors must remember to abide by when they are posted in hospitals. Part 1 of Section 806 of the Fair Debt Collection Practices Act, covering harassment or abuse, provides against threats, so debt collectors have to make sure that patients do not believe they will be denied examination if they do not pay beforehand. Additionally, Section 804, part 1 specifies that agents must identify themselves as debt collectors and have nothing to do with medical services to prevent confusion.