Michael J. Sacopulos, Esq.
An doctor was sued several weeks ago for her use of a healthcare financing company. The suit was brought as a class action and is based upon consumer fraud laws. The allegations center around the way the credit application was presented and when it was signed by the patient. The patient claims that she did not understand that she was signing a credit application and that the practice performed unnecessary work in an effort to collect the entire amount of her line of credit. The doctor needs to prepare for a long, painful process. This is not a medical malpractice case, so normal professional liability policies will not cover it. Further, given the general public’s current hostility towards finance firms, there is a risk to taking the case to a jury.
Basically, this is a predatory lending case. Predatory lending is a general description for activities that violate consumer laws. A common element to most predatory lending cases include the lender or lender’s agent engaging in fraud or deception to conceal the true nature of the loan obligation from an unsuspecting or unsophisticated borrower. This means that a practice could be sued based on what information was presented to a patient or for how a signature of the application was secured.
It seems that this doctor is not alone. News reports from Houston, Texas to National Public Radio have been looking into allegations of predatory lending in the medical world. A quick Google search for “predatory lending” yields dozens of law firms looking to represent “victims.” The Attorney General of New York has launched an investigation into medical lending firms. It seems we are at the start of a trend that will result in a wave of predatory lending cases being filed against medical providers.
Medical finance firms can provide a service to both patient and practice. The question should not be whether to offer patients a financing option, but how and when to offer this option.
Do’s and Don’ts
- I recommend that the credit application be given to the patient without other documents.
- Don’t hand the patient a stack of documents with an instruction to “sign these.” A separation in time from when the patient applies for the line of credit and when the professional services are rendered also helps.
- Staff should be familiar with how the credit firm works to answer basic questions and should refer the patient directly to the financing firm for more specific information.
- Finally, a little common sense should be used. Don’t present a credit application to a patient that is heavily medicated or is not in a condition to fully appreciate what they are signing.
With a little training of staff and appropriate procedures, a practice can go a long way to protecting itself from a predatory lending claim.
Just another example of people not taking responsibility for their actions. Probably smoking a cigarette and eating a double burger with extra cheese. At what point do we hold individuals responsible for actions or lack thereof.
The above response is obscene. Dentistry ranked as one of the most trusted professions just a few years ago. We not only cared for mouths but we cared for people. Now it seems some only care for their own wallet. Another scam you might like is you can teach the frail, often time early dementia elderly on fixed incomes who own their homes to refinance their homes for that perfect smile. Of course they will not be able to pay the new mortgage with their social security payments. We had a sterling fellow doing this in Washington. He left after several malpractice cases. I now understand he is practicing in Florida; Many more targets there. The fact that this post helps professionals do what it describes in a legal way makes me ill. I have been proud to do dentistry for 50 years. This post makes me a think I should keep it quiet.
In Dentistry and probably other elective health care services, in my humble opinion is best to encourage patients to know their budgets and financing options before any treatment plans are presented. This allows the doctor to provide services based on the patient’s budget and it allows the patient to be more realistic of what they can afford and not afford. In our office, we are very proactive in discussing the patients budget on elective services first and refer them if necessary to 3rd party lending companies prior to coming up with a recommended treatment plan. IMHO, this is a win win situation for both the patient and the practice.
As a plastic surgeon, I have long questioned the ethics of advising potential patients to finance cosmetic surgery. Providing consultations to potential cosmetic surgical patients should include the element of discussion of economic as well as medical risks. Part of the reason for a consultation is to counsel patients on the wisdom of having surgery at this stage of his or her life. Salesmanship of loan programs with hefty interest rates, though widely practiced is not in the patient/consumer’s best interest.