Hospitals Auctioning Medical Bills
June 3, 2008 by Laura | Trackback URI
People are increasingly being trained that medical bills aren’t an obligation they really have to take care of, and hospitals are looking for new ways to collect those unpaid bills: Hospitals Put Patients’ Debt Up for Auction
In a move that consumer groups say could increase pressure on people with unpaid medical bills, some hospitals are trying out a new tactic to recoup patients’ debts: They’re auctioning the debt online.
Hospitals have long relied on outside collection agencies to go after debtors. Under traditional arrangements, these agencies receive a percentage of any money they get from a debtor; the more they collect, the more they earn.
Now, some of the same collection agencies, as well as other firms that purchase debt outright, have begun participating as bidders in online auctions, in which they buy the debt or provide guaranteed payments to hospitals for access to the unpaid accounts.
… The auctions reflect hospitals’ continuing search for ways to collect from the uninsured and underinsured. In 2006, nearly 5,000 community hospitals provided uncompensated care totaling $31.2 billion — mostly unpaid patient bills or charity care — representing nearly 6% of all costs, according to the American Hospital Association.
The amount of debt auctioned so far is relatively small. ARxChange.com says it has handled more than $400 million in patient debt in about 27 auctions, involving nine hospital systems and four individual hospitals. Medipent.com says it has hosted events involving 12 New York hospitals and $60 million of debt.
If you’re a consumer, nothing much changes for you except the person at the other end of the phone. We’re still protected by the Fair Debt Collection Practices Act.
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