GE Health­care-In­tel tops list of pro­posed deals an­nounced last week

N.Y. to in­ves­ti­gate preda­tory lend­ing in health­care

Modern Healthcare - - Front Page - Gregg Blesch

Con­sumer ad­vo­cates have warned in re­cent years that med­i­cal credit cards can be dis­as­trous for pa­tients un­aware of what they’re get­ting into. The cause now has the mus­cle of An­drew Cuomo, the pop­ulist New York at­tor­ney gen­eral and a can­di­date for gover­nor. Last week Cuomo an­nounced his of­fice is in­ves­ti­gat­ing al­le­ga­tions of preda­tory lend­ing and kick­backs to health providers by GE Money’s CareCredit.

CareCredit is pitched to pa­tients as a way to pay for health­care ser- vices not typ­i­cally cov­ered by in­surance with no in­ter­est if the bal­ance is paid back within a cer­tain pe­riod, rang­ing from six to 24 months.

Cuomo, though, said his of­fice has fielded hun­dreds of con­sumer com­plaints from New York res­i­dents who said that providers pres­sured them into ap­ply­ing for the card and failed to dis­close that an in­ter­est rate of more than 25% would be ap­plied retroac­tively to any amount not paid within the in­tro­duc­tory pe­riod. Some also said they were charged for ser­vices never pro­vided, which CareCredit paid and failed to re­verse the charge to the card­holder’s ac­count.

Providers paid fees to CareCredit to be able to of­fer the cards, and CareCredit then is­sued re­bates ac­cord­ing to how much busi­ness was gen­er­ated, ac­cord­ing to Cuomo, who char­ac­ter­ized those re­bates as kick­backs.

“We look for­ward to learn­ing more about this mat­ter and work­ing with the at­tor­ney gen­eral’s of­fice,” GE spokesman Stephen White said in an e-mail and de­clined to com­ment fur­ther.

Cuomo has a track record in health­care that might make any tar­get ner­vous. In early 2009, Cuomo went af­ter health in­surance com­pa­nies over the wide­spread use of a pro­pri­etary In­genix data­bases to cal­cu­late out-ofnet­work pay­ments to physi­cians, which the Amer­i­can Med­i­cal As­so­ci­a­tion and other physi­cians groups had been fight­ing for a decade. By the end of the year, In­genix and its par­ent, Unit­edHealth Group, had agreed to pull the plug on the prod­ucts and pay $350 mil­lion to set­tle the AMA’s law­suit.

The terms and in­ter­est rates CareCredit of­fers are clearly stated on the com­pany’s web­site, which in­cludes a sec­tion of­fer­ing cus-

Stoll: Growth in med­i­cal credit cards a “very alarm­ing trend.”

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