The new medical-credit racket

The Record uncovers how patients are getting shafted—medically and financially

Reporter Lindy Washburn, at The Record in Bergen County, New Jersey, has revealed the latest shenanigans of unscrupulous members of the medical profession out to make a buck. Washburn, who is something of an expert on the business practices of health care providers, investigated the unsavory activities of New Jersey doctors, dentists, and chiropractors who pressure patients to sign up for credit cards, recommend more expensive treatments than necessary, and sometimes do not complete the treatments once the money lands in their pockets. Combine an old-fashioned consumer story with health care enterprise reporting, and you have a tale of greedy medical practitioners preying on consumers.

Washburn highlighted pernicious practices that take advantage of patients when they are vulnerable, in need of immediate treatment. She reported on the predicament of Allison DeBlois, “who signed a credit card application while in agony at her practitioner’s office.” DeBlois offered words of warning: “Even though you’re in pain, you just ought to walk out the door and take some more Ibuprofen.”

What happens is this: Patients sign up for a credit card; the bank or credit card company gives instant approval, doctors get paid for care and services that might normally be billed weeks or months later; patients get stuck with thousands of dollars of debt with interest rates of twenty-four percent or more. What’s worse, they may not get the care they thought they were getting or even agreed to. Washburn examined court records and found the case of one dentis, from Manalapan, New Jersey, who had more than a dozen allegations of credit card abuse against him. One patient signed an agreement with the understanding the loan would be activated only if she proceeded with treatment. Instead she got stuck with a $6,000 loan. State prosecutors alleged the dentist was paid thousands of dollars more than patients thought they had agreed to. In one case, he was paid twice—by the patient’s insurance company and by the credit card lender.

Washburn reported that major—and well-known—lenders have offered these single-purpose credit cards or lines of credit for health care. They include JPMorgan Chase, GE Capital, and Capital One. The New Jersey Dental Association has officially endorsed CareCredit, an association business partner. CareCredit bills itself as a “the credit card just for your health and beauty needs,” and tells prospects on its website that its card “removes the accounts receivable responsibilities from the doctor and allows them to focus on recommending and providing the best care to their patients.” Sounds attractive, doesn’t it? In other words, if doctors don’t have to worry about getting payment from you, they can concentrate on giving you the best care.

Washburn’s piece challenges that assumption, reporting that the cards may give providers an incentive to sell more costly treatments since they now have a guaranteed payment for them. But as we know costly treatments may not be better and can lead to dangerous overtreatment for some conditions.

It’s not likely those cards will disappear. More patients or consumers will use them, especially as co-payments, deductibles, and coinsurance—a percentage of the bill you pay—climb higher and higher, as employers continue to shift medical costs to employees. Lenders are betting these credit cards will appear to help ease the financial pain.

Given that such arrangements may be the future, it would be good to know what rights and protections consumers have in this brave new world of health credit cards. The Record’s story did not go far enough here. At the end of a strong piece came some fairly lame, caveat emptor advice from the state’s Division of Consumer Affairs: Research treatment options. Know what you’re getting into. Don’t succumb to high-pressure sales tactics. Duh? What I wanted to know is where are the protections of the federal Fair Credit Billing Act. Do they apply? How? What can someone do if they are pressured and treatments are not done?

And if there are not enough protections in place, should there be? The next iteration of this story by The Record or other news outlets should go in that direction.

Has America ever needed a media watchdog more than now? Help us by joining CJR today.

Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: , , ,