Are providers burying patients in credit card debt?

The number of individual providers offering lines of credit to Medicare-eligible patients to pay for care is mushrooming and possibly altering the relationships between the two parties, the New York Times reported.

Some of these credit lines have interest rates of 20 percent or more per year, with penalties above 30 percent for a missed payment, according to the Times. They're often offered to patients whose Medicare or private insurance does not cover specific procedures or costs. And despite the onerous terms, some of the credit companies, like iCare Financial in Atlanta, have seen their enrollment more than triple over the past three years, while the number of providers offering their credit cards have quadrupled.

The credit offers enable providers to get patients to undergo procedures they might normally forego, plus they are paid for the care they provide upfront, according to the article.

However, whether the rollout of the Affordable Care Act will  affect the future of this business remains up for debate. Industry observers expect demand for these credit cards to wane as more people gain insurance, FierceHealthFinance previously reported.

Moreover, several state attorneys general are investigating the use of these credit cards and credit lines. The companies are able to "bill whatever they want for care, regardless of whether the cost is reasonable," Brian Cohen, an attorney who represents a patient in a class-action suit, told the Times. After an investigation by the New York Attorney General's office, one company, CareCredit, agreed to improve consumer protections and not pay referral fees to providers.

To learn more:
- read the New York Times article