ACA Urges Medical Collectors to Keep Collecting Despite LA Lawsuit

Lawsuits filed by the City of Los Angeles against health insurers Health Net and WellPoint, Inc. should not stop health care debt collectors from attempting to recover payment from consumers affected by the cases, says a debt collection industry expert.

“Debt collectors are hired to collect debt,” said Rozeanne Andersen, executive vice president and general counsel for ACA International, an association for debt collection professionals. “Until a final judgment is determined, debt collectors can assume the debt is valid.”

Last week, LA City Attorney Rocky Delgadillo sued WellPoint, Inc. and two subsidiaries accusing the insurers of illegally cancelling health care coverage that left thousands of Californians with unpaid medical bills (“LA Sues Insurer for Canceling Health Care Coverage,” April 22). A few weeks earlier, it filed a similar suit against Health Net and two of its subsidiaries, saying the insurers denied more than $35 million in claims between 2003 and 2006. In some situations, payments were denied after a procedure had been pre-approved by the insurers.

The two lawsuits claim that more than 7,600 people were denied benefits, including many in serious or critical need of care. Consequently, some or all of those consumers with cancelled health care coverage may have ended up in collections. Some affected consumers could argue that the debt isn’t valid and cite the lawsuit as reason not to pay or delay payment.

Given the potential for bad press and damaged relationships between the provider and patients, Andersen advises debt collectors to ask health care providers what their policies are for debt in legal dispute and how they’d like the situation handled.

“It’s a smart business move,” she said. “It’s possible that the health care provider will suspend the obligation to pay until a legal judgment is made.”

If nothing else, the situation presents an opportunity to remind consumers that they can request that the provider verify the debt, Andersen said. Collectors also can inform consumers they contact for payment about their health care provider’s charity care programs or other government medical care programs for which they may qualify.

Andersen also suggested that collectors can review the ACA’s health care principles and guidelines.

“Collectors are carriers of solutions,” Andersen said. “Consumers should not shy away from conversations with collectors.”