ACA Chief Tells Senate: Don't Apply FDCPA to Hospitals

 
Not-for-profit hospitals should not have to comply with the Fair Debt Collections Practice Act (FDCPA) when collecting debt, the president of ACA International said this week at the Healthcare Roundtable Discussion held by the Senate Finance Committee in Washington, D.C.

Chris Wunder said the industry also should be allowed to continue using collection professionals and existing legal remedies to collect bad debt.

Non-profit hospitals provide about 80 percent of the medical care in the U.S. and receive an estimated $50 billion in tax breaks each year. The committee is researching whether these hospitals provide enough charity care to justify the tax benefits. 

Collection agencies handle a variety of services for hospitals including screening for charity care applicants, and are already are governed by the FDCPA, Wunder told the roundtable. However hospitals are not.

Wunder said requiring hospitals to inform patients at the beginning of a conversation that any information they provide could be used to collect an outstanding debt, as the FDCPA mandates, could be “off putting” and “offensive” to patients who are inquiring about their billing statements, particularly new accounts.

That will lead many patients to believe the hospital already considers their account as bad debt and respond by terminating communications with the hospital, he said. “Frankly, if hospitals were required to (comply with FDCPA), it would be to the patient’s detriment,” Wunder said. “It would necessitate more lawsuits because that would be the only way to continue the collections process.”

Wunder, president of ROI Companies, a Baltimore-based healthcare collection agency, was invited to participate in the Oct. 30 roundtable discussion by Sen. Charles Grassley, an Iowa Republican. Grassley, the ranking member of the finance committee, has been the driving force behind the roundtable, saying he may introduce legislation covering non-profit hospitals.

Grassley also is considering whether the FDCPA should apply to tax exempt and government hospitals and if hospitals are trying to collect payment from people who should receive free care.

“Our position is we don’t try to collect from people who can’t pay,” Wunder told insideARM.  “If someone is unable to pay, it makes no sense going though the expense to go after these people.”

As for using the courts to collect payment, Wunder said hospitals should not be singled out, but allowed to use the courts as any other industry would. “Don’t take away the courts system as a remedy,” Wunder said. “We’re not out there suing people willy-nilly. It would be a bad business practice."

ACA International is the leading trade association for collection professionals.