Linking Credit Scores to Hospital Care

We have talked about this before ‰ÛÒ hospitals using credit scores to help determine whether a person has the ability to pay their hospital bill. Of course the industry assured us that this would be done retrospectively, that is they would use the data to start trending and benchmarking but not to single out individuals to prevent or deny treatment. Then comes this Business Week article.

Hospital administrators are looking at patient data‰ÛÓcredit scores, credit-card limits, and 401(k) balances‰ÛÓnot usually associated with treatment decisions. Health experts fear that hospitals will use techniques borrowed from the mortgage and car-loan industries to deny treatment to consumers.

In the story, a Dallas resident fractured her skull, neck, and back in a car crash in April 2005. A Dallas hospital gave her free care worth more than $100,000 because her job as a mortgage adviser offered no health insurance. When she returned in June 2006 for a scheduled CAT scan, however, she was told she no longer qualified as a charity case because her credit score was too high. She never got the scan. In another case, a person was rejected for subsidized treatment because of an $1,800 line of credit she had available on her Visa card.

SearchAmerica in Maple Grove, Minn. is one of the numerous data-mining companies around the country that have signed up hospitals as clients. Passport Health Communications is another provider of services. SearchAmerica says that it has 1,000 hospital clients. Their software sometimes labels patients who qualify for charity treatment as “likely” to pay. An aggressive hospital billing department might be tempted to ignore its traditional charity standards and seek payment from lower-income patients identified in this fashion.

Lawmakers in one state, Minnesota, have tried to restrict medical credit scoring.

So as always two messages for two different audiences. Colleagues in the profession need to be transparent about how they qualify and administer their charity programs and be prepared to answer these questions from consumers. Consumers need to ask whether the hospital has indeed contracted with one of these data companies and how they are using that data. And maybe Minnesota is on to something in seeking legislation restricting medical credit scoring. Bottom line ‰ÛÒ ask the tough questions.