Tags: New | York | Investigating | Healthcare | Credit | Cards

New York Investigating Healthcare Credit Cards

Thursday, 05 Aug 2010 09:56 AM

Attorney General Andrew Cuomo launched an investigation Wednesday into healthcare credit cards after receiving hundreds of complaints from consumers who were convinced by doctors and dentists to sign up for them.

Investigators will look into financial incentives providers receive for promoting the cards that can leave patients struggling with overcharges and high interest rates, Cuomo said Wednesday.

"You can't wear two hats in the operating room," the attorney general and Democratic candidate for governor said in Buffalo. "You can't have the hat of a doctor and the hat of a financing agent at the same time. That's a conflict of interest."

Subpoenas have been issued to 10 providers, some with multiple offices, that promote GE Money's CareCredit card, Cuomo said. Meanwhile, medical associations that endorse the card, including the American Dental Association and American Society of Plastic Surgeons, are being asked to explain their support.

Cuomo's office also issued subpoenas to learn how three other healthcare card programs are run: Chase Health Advance, Visa Health Benefits and Citibank Health Card.

Cuomo said providers have been urging cardholders to finance procedures including dental work, cosmetic surgery and veterinary services not covered by insurance and even when they can pay in cash. He said CareCredit, for instance, charges providers a fee to offer the card and rebates part of the fee based on how much business the providers get consumers to charge.

Providers are paid within two days of the charge, giving them even more incentive to push the cards, Cuomo said.

"Healthcare debt is the number one cause of individual bankruptcy and this scheme is contributing to the economic burden being felt by consumers," Cuomo said.

GE Money, a subsidiary of Fairfield, Conn.-based General Electric Co., received a subpoena to provide its customer list. The card is accepted by more than 125,000 healthcare practices nationwide. The company did not immediately respond to an e-mail request for comment.

Philip Palumbo, 80, of Rochester said he signed up for CareCredit to pay for an estimated $5,600 in dental work, not realizing he was agreeing to a credit card. After having the work done elsewhere, he continued to receive bills from CareCredit and wound up with a strike on his credit report.

"We are concerned that some healthcare providers are aggressively marketing these high-interest credit cards to patients without providing appropriate disclosures, protections or refunds," said Chuck Bell, program director for Consumers Union, which publishes Consumer Reports.

American Dental Association President Ronald Tankersley said the group, after receiving Cuomo's letter, shares the attorney general's concern about credit financing practices.

"Financing can greatly benefit patients when it comes to paying for their dental treatment, provided that patients fully understand the terms of the financing program," Tankersley said.

Phil Hayes, spokesman for the American Society of Plastic Surgeons, said his group had yet to receive the letter. He reserved comment.

Healthcare providers sent subpoenas include: Allcare Dental Management Inc. of Buffalo; American Laser Centers of Farmington Hills, Mich.; Aspen Dental Management Inc. of East Syracuse; East Syracuse Family Dental Arts; Laser Cosmetica of New York City; Lifestyle Lift of Troy, Mich.; Northern Lights Chiropractic of Watertown; S & Y Diamond Dental P.C. of Brooklyn; Sunshine Dental of Watertown, and Toothsavers of New York City.

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Attorney General Andrew Cuomo launched an investigation Wednesday into healthcare credit cards after receiving hundreds of complaints from consumers who were convinced by doctors and dentists to sign up for them. Investigators will look into financial incentives providers...
New,York,Investigating,Healthcare, Credit,Cards
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2010-56-05
Thursday, 05 Aug 2010 09:56 AM
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