"Questionable Numbers" Impair Healthcare Reform: Med Collection Chief

The CEO of a medical collection agency thinks that while healthcare reform in his home state of California will have little affect on his business, there should be better information driving the decision to overhaul the system in the first place.

Jack Nixon, chief of Brea, Calif.-based CMRE Financial Services, says that much of the current debate surrounding healthcare reform is based on “questionable numbers.” An oft-cited study by the U.S. Census Bureau says that 47 million Americans went without health insurance in 2006. Another popular study by a Harvard professor said that some 50 percent of bankruptcy cases in 2001 were caused “at least in part, by illness or medical debts.”

“I just can’t figure out where they got those numbers,” says Nixon. He said that CMRE did their own audit of the more than 2 million accounts it was working in 2005. The data said that less than 2 percent of the accounts were in bankruptcy and that the average balance on the accounts was less than $650, hardly an amount that would force bankruptcy, said Nixon.

“It’s anecdotal, but here at CMRE, we offer health insurance to all of our 450 employees. Only about 40 percent of the workers take it,” he said.

Nixon also says that plans to reform the healthcare system in California – and ultimately nationwide – will not have a large impact on his business and other similar agencies. “Our business will always be around,” Nixon said. “A possible side-affect of the California legislation I see is the potential elimination of business offices at healthcare providers.”

The California legislature recenty passed a bill that would create a form of universal healthcare by mandating all residents be covered by insurance. Gov. Arnold Schwarzenegger vetoed the measure, and called a special session to work out a plan.

The vetoed plan called for a 7.5 percent general payroll tax and a 2 percent tax on doctors. Other proposals included making FDCPA compliance mandatory for healthcare providers that are attempting to collect debts.

Nixon said that forcing healthcare business offices to adhere to the FDCPA or put them under the scope of the FTC would cause the businesses to shut down those units, instead outsourcing the billing and collection function to companies like his.