Hospitals Increasingly Reviewing Patients’ Personal Financial Information To Gauge Ability To Pay
A "growing number" of U.S. hospitals are accessing patients' personal financial information to help determine how likely patients are to pay their medical bills, the Wall Street Journal reports. According to the Journal, some hospitals look at patients' credit reports -- which provide information on available lines of credit, debt and payment histories -- while other hospitals employ third-party services that predict patients' ability to pay based on factors such as income.
Hospitals typically use such services for uninsured patients and insured patients with high out-of-pocket costs. Officials say checking patients' financial information allows hospitals to determine more quickly which patients to pursue for payment because they can afford it, as well as which patients are eligible for charity care or assistance programs. Some firms -- such as the credit bureau Equifax and SearchAmerican, which mines credit bureau data -- have begun offering health care credit scores to provide more reliable information about a patient's likelihood of payment.
According to the Journal, it is "unclear how much latitude hospitals have to legally check a patient's financial information." Hospitals often ask patients for permission to access their information, "but such authorization is sometimes buried in the fine print," the Journal reports. Rebecca Kuehn, an assistant director in the Federal Trade Commission's division of privacy and identity protection, said hospitals become creditors after a patient owes money and have strong grounds for checking a credit report even if the patient has not granted permission. Some credit industry officials "argue that a hospital typically takes on the role of creditor the minute a patient walks in the door" and has a right to access credit reports without explicit permission, the Journal reports.
Hospitals maintain that the efforts are intended to minimize uncompensated care losses, but consumer and patient advocates have raised concerns that reviews of patients' financial information creates the potential for hospitals to misuse the data or provide lower-quality care if a patient cannot pay. In addition, advocates say hospitals could identify lines of available credit and "encourage the patient to tap them, despite high interest rates or other costs," the Journal reports. Mark Rukavina, executive director of the Access Project, said the practice "has the potential to put people at risk financially" (Rubenstein, Wall Street Journal, 3/18).
