HAS PREDATORY HEALTH CARE LENDING COME TO HOBOKEN?

ATTORNEY GENERAL CUOMO LAUNCHES INDUSTRY-WIDE INVESTIGATION INTO PREDATORY HEALTH CARE LENDING THAT IS PUSHING CONSUMERS NATIONWIDE INTO DEBT

Health care credit card scheme preys on seniors and vulnerable patients ~Cuomo subpoenas health care practices and credit card companies

NEW YORK, NY (August 4, 2010) – Attorney General Andrew M. Cuomo today announced an industry-wide investigation into predatory health care lending where consumers, especially seniors and vulnerable patients, are misled about financing, causing them to be pushed into debt.

An investigation by Attorney General Cuomo found that some health care providers pressure consumers into using GE Money’s CareCredit, a health care credit card, through fast-talking sales pitches and deceit. The investigation also found that CareCredit often pays kickbacks in the form of rebates to the providers based on how much business they charge consumers on CareCredit cards.

The investigation was based in part on hundreds of consumer complaints received by the Attorney General’s Office. Consumers reported that health care providers promised that the credit card had “no interest,” when it often carried retroactive interest of over 25 percent if not paid in full during a promotional period. Consumers were also unknowingly charged up front for services they never received, and their attempts to obtain refunds were often thwarted or ignored. Meanwhile, CareCredit pays the health care providers in-full within 48 hours of the charge.

The investigation also found that CareCredit charges the providers a fee for the right to offer the cards, and then rebates part of the fee based on the amount of money the providers generated through CareCredit sales. This kickback arrangement, plus CareCredit’s payment in full to providers within two days of the charge, creates an incentive for providers to push consumers to use CareCredit rather than other methods of payment. In fact, providers pushed CareCredit over cash.

“Health care debt is the number one cause of individual bankruptcy, and this scheme is contributing to the economic burden being felt by consumers,” said Attorney General Cuomo. “People are being tricked by misleading offers that have them paying for services they never received as well as interest charges they never knew about – and they are ignored and given the runaround when they try to get their money back.”

Cuomo issued subpoenas to 10 providers that promote CareCredit, as well as to the companies that manage CareCredit, Chase Health Advance, Visa Health Benefits, and Citibank Health Card. The subpoenas seek marketing materials, applications, terms of credit, contracts and rebate agreements, policies and procedures, consumer complaints, and regulatory inquiries. This investigation is ongoing.

In addition, Cuomo is asking several nationwide and state-based medical associations, including the American Dental Association and the New York State Dental Association, to explain why they endorsed CareCredit and whether they received compensation for doing so. 

CareCredit is accepted by more than 125,000 health care practices nationwide. The New York State Dental Association asserts that more than 8 million dental patients and 80,000 dental practices use CareCredit nationwide. The credit card is advertised as a way to pay for services often not covered by insurance, including:

  • Chiropractic procedures
  • Cosmetic procedures
  • Dental procedures
  • Infertility treatment
  • Hearing procedures
  • Vision procedures
  • Weight loss procedures
  • Veterinary services

In recent years, Attorney General Cuomo’s Office received hundreds of complaints from consumers indicating that they were lured and misled by providers into applying for, accepting, and using CareCredit. Among the complaints received by the Attorney General’s Office regarding the scam: 

  • A Williamsville resident went to a dental provider with a toothache and was told he needed $9,000 in work done. He told the practice’s office manager that he had the ability to pay for the service in cash, but he was still persuaded to sign up for financing through CareCredit. He ended up having the work done elsewhere, but the full amount of charges was billed to his card, despite receiving no services from the practice.
  • An Onondaga County woman was told by a dental practice she needed a variety of procedures, and to get them she would have to sign a CareCredit agreement. After only having one $400 procedure done, which she paid for, she received a bill for $2,600. Her attempts to get a refund were rejected by both the provider and CareCredit.
  • An Oswego woman was given a $6,000 estimate for dental procedures. She was urged to sign up for CareCredit, and was told this was an interest-free, monthly payment plan. However, she was charged up-front before the procedures were done, plus interest.
  • A Monroe County man signed up for CareCredit to pay for an estimated $5,600 in services from his provider, but it was not made clear he was agreeing to a credit card. He left the medical office and sought treatment elsewhere, but continued to receive bills from CareCredit, which insisted he was delinquent on payments, resulting in a negative credit report and the reduction of his other lines of credit.
  • A Syracuse-area consumer was told by his chiropractor that he needed two years of treatment and he was signed up for a CareCredit card without his consent. He was charged $3,000, which CareCredit refused to rescind. When the consumer switched to a different provider because the treatments at his chiropractor worsened his condition, the practice refused to release his medical records, claiming he still owed them money. 
  • A woman from Tioga County went to a provider where an application to CareCredit was “thrown in (her) face.” No other financing options were offered to her, and she was charged $5,000 for a procedure that failed multiple times and for which another provider later charged only $1,200.

Chuck Bell, Programs Director for Consumers Union, nonprofit publisher of Consumer Reports, said, “Attorney General Cuomo’s investigation shines a badly-needed spotlight on deceptive practices used to market health care credit cards to elderly and low-income consumers. We are concerned that some health care providers are aggressively marketing these high-interest credit cards to patients, without providing appropriate disclosures, protections, or refunds. Consumers Union strongly supports the Attorney General's investigation, and applauds his ongoing efforts to protect consumers across the nation.”

Catherine Dunham, President of The Access Project, a resource center for local communities working to improve health and health care access, said, “With the cost of health care already an enormous burden on Americans, we must do everything we can to filter out abusive or deceptive practices in how providers take payment for care. Attorney General Cuomo’s investigation into health care credit cards will help protect millions of patients across the country who are struggling with debt. We applaud his efforts and look forward to continuing to partner with him to protect patients.”

The investigation is being conducted by Assistant Attorney General Carol Hunt of the Health Care Bureau under the supervision of Executive Deputy Attorney General for Social Justice Mylan Denerstein and Special Counsel to the Attorney General Linda A. Lacewell. 

Subpoenas to Health Care Providers:

  • Allcare Dental Management Inc. - Buffalo
  • American Laser Centers - Farmington Hills, MI
  • Aspen Dental Management, Inc. - East Syracuse
  • East Syracuse Family Dental Arts - East Syracuse
  • Laser Cosmetica - New York City
  • Lifestyle Lift - Troy, MI
  • Northern Lights Chiropractic - Watertown
  • S & Y Diamond Dental P.C. - Brooklyn
  • Sunshine Dental - Watertown
  • Toothsavers - New York City

Letters to Groups Endorsing CareCredit:

  • American College of Eye Surgeons
  • Society for Excellence in Eyecare
  • American Dental Association
  • Academy of General Dentistry
  • American Academy of Periodontology
  • American Association of Oral & Maxillofacial Surgeons
  • New York State Dental Association
  • American Society of Plastic Surgeons
  • American Society of Dermatologic Surgery
  • American Animal Hospital Association
  • New York State Veterinary Medical Society
  • American Hearing Aid Associates
  • American Society of Bariatric Physicians
  • Lite and Hope

EDITOR'S NOTE:  New York State Attorney General Andrew M. Cuomo deserves a round of applause for initiating this investigation.   Here is a report from National Public Radio confirming that payments were accepted by the CDA and ADA in exchange for the endorsement of CareCredit.

Paid Endorsements  - NPR Reports;

The California Dental Association, or CDA, endorses the card, as does the American Dental Association. Both organizations get paid for those endorsements. Mark Rukavina from the health care advocacy group The Access Project says using credit to pay for medical care is bad. But he says undisclosed endorsement payments are even worse.

"The blurring of medical provider and financial services provider is problematic," Rukavina says. "But when you have a financial stake in the marketing of these cards to patients, it's even more perilous."

Cathy Mudge, the CDA's chief administrative officer, acknowledges that the association does not publicly disclose the payment but says it shouldn't have to.

"If we do endorse a product, we believe that we've done the research and analysis to assure that it's an excellent product for both the dentist and the patient," Mudge says.

But Rukavina says, "Unless they're at risk of losing life or limb, we would advise people not to put medical expenses on their credit cards."

Rukavina says setting up a payment plan directly with the dentist is a better option. As for the bigger picture, last year Gov. Arnold Schwarzenegger vetoed that California bill to regulate dental credit cards. Advocates are sponsoring similar legislation again this session.

Cuomo opens kickback probe into GE CareCredit card
08/04/2010 by Jonathan Stempel  - Reuters

RESOURCES:

Here is a letter from AG Cuomo to the American Dental Association which accepted payment from CareCredit for the ADA endorsement

CareCredit Participating Providers:  

"HOBOKEN PROVIDERS"     "ZIP CODE OR DOCTOR SEARCH"

If your provider is listed, ask them to explain their participation in the CareCredit program. 

CareCredit Terms and Conditions: 

Read the Terms and Conditions of the CareCredit account.  It restricts your legal options, for example;

YOU AGREE NOT TO PARTICIPATE IN A CLASS, REPRESENTATIVE OR PRIVATE ATTORNEY GENERAL ACTION AGAINST US IN COURT OR ARBITRATION.  ALSO, YOU MAY NOT BRING CLAIMS AGAINST US ON BEHALF OF ANY CARDHOLDER WHO IS NOT A JOINT OR ADDITIONAL CARDHOLDER WITH YOU ON YOUR ACCOUNT (AN “UNRELATED CARDHOLDER”), AND YOU AGREE THAT NO UNRELATED CARDHOLDER MAY BRING ANY CLAIMS AGAINST US ON YOUR BEHALF. CLAIMS BY YOU AND BY AN UNRELATED CARDHOLDER MAY NOT BE JOINED IN A SINGLE ARBITRATION.

STATE NOTICES  (New Jersey State Attorney General please take Note)

NJ RESIDENTS: Certain provisions of this Agreement are subject to applicable law. As a result, they may be void, unenforceable or inapplicable in some jurisdictions. None of these provisions, however, is void, unenforceable or inapplicable in New Jersey.

INVESTIGATIVE AGENCIES:

NEW YORK:  Consumers wishing to file complaints regarding deceptive health care credit card practices are urged to contact the New York Attorney General’s Office at 800-428-9071 or HealthCreditCards@ag.ny.gov.  Assistant Attorney General Carol Hunt of the Health Care Bureau under the supervision of Executive Deputy Attorney General for Social Justice Mylan Denerstein and Special Counsel to the Attorney General Linda A. Lacewell. 

NEW JERSEY:  Consumers wishing to file complaints regarding deceptive health care credit card practices are urged to contact the New Jersey Attorney General's Office at 609-292-4925 or the Office of the Attorney Generals Citizens Services Webmail Form.  

FEDERAL REGULATOR:
GE MONEY BANK / CARECREDIT is chartered as a Savings Association. Therefore the primary federal regulator is the Office of Thrift Supervision (OTS). For consumer assistance regarding an issue with this institution, please contact the OTS directly using Consumer Complaints and Inquiries.

Victims of CareCredit or another PREDATORY HEALTH CARE LENDING SCHEME,  please leave a comment on this blog listing the Health Care Credit company and SERVICE PROVIDER.   I would also appreciate private an email detailing your predatory health care experience, audio and/or copies of letters from PREDATORY HEALTH CARE LENDING companies or participating providers, and the actions you have taken to resolve the problems.  

 


Comments (2)

Mary Scott
Said this on 3-31-2011 At 11:35 am

I first started using care credit in 2007.

I had missing teeth and needed a valplast partial.  I applied for a care credit account and was given a $1000 credit limit.  My dentist was Dr. Marc Weber out of Red Bank, NJ.   He has since left that practice.  

They charged me $985 and told me I had to go to an oral surgeon to have the remnants of a broken tooth removed.    They were going to set an appt for me.    They took an impression and soon afterwards they absconded with the $985 that Care Credit paid them.   

I have been paying them back month after month, trying to get it paid off, which doesn't seem like that will ever happen.  I called the dentist that took over Dr. Weber's practice and they said if I could bring the invoice of the original agreement with Care Credit and Dr Weber, they would honor it and I could get my valplast partial.   

The problem is, I never got any kind of agreement from them.   Just a monthly bill.   I called them and explained why I needed the invoice.    They couldn't find my agreement on file and gave me a number to call.    I called them and they said I had to request this in writing.    I requested it in writing 3 times by certified mail.   They wrote and said it was unavailable.    They have no record of it.   But I'm betting if I stop paying they will come up with it quick enough.    It's been a year since I contacted the other dentist who was going to honor it.     

I'm quite sure that no longer holds true.  Plus the cost of a Valplast partial has gone from $985 to $1400.  So now I can't even afford to get this partial and my dentist made $985 for work not done and I've been paying Care Credit for paying the dentist for work not done.  I want them to cover the cost of my valplast partial.   I need this done and I don't know where to turn.

 

Said this on 5-23-2011 At 07:49 pm
Glad I've finlaly found something I agree with!

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