GE Healthcare-Intel tops list of proposed deals announced last week
N.Y. to investigate predatory lending in healthcare
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.”