UIHC seeks credit scores to see if patients likely to pay

IOWA CITY - The University of Iowa Hospitals and Clinics has been quietly peeking at patients' credit scores as a way to determine how likely they are to pay their medical bills.

Although the hospital said the credit information doesn't go to doctors or fundraisers, one patient is concerned the financial information could be used to market 'Cadillac care” to patients who can afford it.

'I think it's a violation of privacy,” said a middle-age Iowa City woman who didn't want her name to be used because she's still a UIHC patient. 'It will add another layer of mistrust between me and my doctor.”

UI Hospitals has paid Experian Healthcare more than $120,000 since May to pull nearly 100,000 patients' credit scores with the goal of figuring out how likely the patients are to pay their medical bills.

Hospital officials said the practice, becoming increasingly common for hospitals across the country, helps them identify which patients need help paying their bills so the hospital can provide counseling about charity care or payment plans.

'I can't imagine a patient wouldn't want this,” said Phil Roudabush, director of patient financial services.

The information also helps with debt collection.

American hospitals provided $45.9 billion in uncompensated care in 2012, which was 6.1 percent of total expenses for nearly 5,000 hospitals included in the American Hospital Association survey. These losses include unpaid bills and charity care.

UI Hospitals went unpaid for more than $100 million in care in fiscal 2013.

Neither UnityPoint Health–St. Luke's Hospital nor Mercy Medical Center check patients' credit reports.

Growing trend

Experian Healthcare, a branch of California-based credit reporting company Experian, works with more than 3,000 hospitals and nearly 1,000 medical practices to maximize revenue collection, General Manager Dan Buell said.

'Health care systems that want to stay afloat are trying to get more efficient,” he said.

The UI pays Experian $11,000 a month for services that include patient credit checks and identity verification. The UI provided The Gazette a copy of a 12-page contract, but half the pages were redacted because they contain the company's pricing strategy, excluded from open records law as a trade secret, UI Spokesman Tom Moore said.

The UI gives Experian Healthcare a list of patients required to pay some portion of their medical bills. These 'self-pay” patients owe anything from a small copay to tens of thousands of dollars for complex medical treatment.

The checks are done without a patient's permission, but if a patient looks at his or her own credit report, the inquiry will show up as 'SearchAmerica for University of Iowa Hospitals and Clinics.”

SearchAmerica is an Experian subdivision.

Based on a patient's credit information, Experian assigns a number between one and five, with one being the best credit. The company passes on the health care credit score to the UI Hospitals's Patient Financial Services Department.

Patients with twos, threes and fours are likely to get a call from a UI employee, Roudabush said.

Experian also provides UI an estimated income and household size for self-pay patients to see if they qualify for charity care.

'It gives us a gauge of the patients we really need to go out and assist,” Roudabush said. The hospital saves money on collection by not having to call all self-pay patients, he said.

Concerns about information use

The UI has received several complaints about the credit checks, Roudabush said, but other patients have said they appreciate the counseling about payment options.

This isn't the first time the UI Hospitals has been criticized for its use of patient information.

In 2012, the hospital acknowledged giving patient names to a fundraising organization that solicits donations through letters signed by UI doctors, the Des Moines Register reported. This type of 'grateful patient” campaign is common, but a patient advocacy group called the effort exploitive.

The Experian credit checks are not part of the grateful patient campaign and patients' financial information does not go to the Foundation, said Ken Fisher, associate vice president for finance of UI Health Care.

Doctors and other health care providers also do not see the health care credit scores, he said.

'This does not become part of a patient's medical record,” Fisher said.

That may be true, said the Iowa City woman who discovered SearchAmerica had pulled her credit report in November.

But she's concerned credit information could be used to scale back care for patients ruled unlikely to pay or push elective procedures on patients who have money. Knowing the hospital checks this financial information makes her wonder about the MRI her husband received when he went to the UI for ringing in his ears.

'They did an MRI first, which is expensive,” she said. 'It turned out to be a simple allergy.”

Credit checks happen after care already has been provided and Experian's Buell said the company doesn't allow hospitals to use patients' financial information to steer future care. The hospital does not sell or provide the health care scores to external parties.

Creditor's rights, responsibilities

UI officials and Buell said the Experian credit check is classified as a 'soft inquiry,” which means checks would not hurt a person's credit score, unlike 'hard inquiries” made when a person applies for a mortgage or a car loan.

But Jonathan Fox, an Iowa State University professor of human development and family studies and director of ISU's Financial Counseling Clinic, said he's not so sure.

'I'm thinking it would be a hard inquiry because it was initiated by your action of checking into the hospital,” Fox said. 'Any sort of transaction might be characterized a bit differently by different (credit) bureaus. It's not a consistent system.”

Since the passage of the Affordable Care Act, non-profit hospitals have faced new requirements to help patients qualify for charity care before hospitals send accounts to collections, said Mark Rukavina, a medical debt and health care access expert who owns Community Health Advisors in Boston.

Credit score and income screens being used by the UI Hospitals may be an effort to comply with these new rules, he said. However, hospitals should be open with patients about the checks.

'This is delicate information,” Rukavina said. 'People should be assured that this will not be used in a predatory manner.”

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