Indiana hospital bills patients for old debts

Subscontractor snafus have caused some embarrassment for the management of an Indiana hospital and also enraged some of its patients, the Richmond Palladium-Item reports.

Patients of Reid Hospital in Richmond had been on the business end of collections for bills that dated back to 2011. Some of the patients had never received prior bills from the hospital. Others received notices from a collection agency without first receiving a bill from the hospital.

"They did not give me time to even take care of it ... but they turned it over to collection anyway. How can they go and charge me for their errors for not properly filing with insurance? This is unfair," Renee Jones, a former Reid patient, told the newspaper. She added that the collections effort will interfere with her efforts to purchase a home.

The mixup stems from a previous issue with a hospital subcontractor that handled billing for Reid. Although it had properly billed insurers, it failed to bill secondary payers, including patients for co-payments and deductibles, according to the Palladium-Item.

Reid Hospital officials acknowledged that they had bungled the handling of the bills. "We apologize for this miscommunication," Reid Chief Executive Officer Craig Kinyon said in a statement. "We have discovered that many of these patients may not have received the standard series of three monthly bills that they should have received before any collection agencies became involved. I take full responsibility for this problem, and we are taking immediate steps to correct it."

Reid also said that patients who receive any collection notices for old debt can ignore them.

The billing of patients by hospitals can be a touchy subject. Some hospitals have received adverse publicity for how they handle such cases. The not-for-profit Mosaic of Life Care in Missouri came under close scrutiny for forming a for-profit company that collected debts on behalf of the hospital, sued patients, and tacked on interest charges for what they owed that were so high that some patients had little hope of ever paying off their bills in full. Those business practices have drawn the attention of Sen. Charles Grassley, R-Iowa.

Reid also said that as of Jan. 1, it had instituted a new policy that even if a patient's account is sent to collections, it will not make an adverse report to any credit agencies.

To learn more:
- read the Palladium-Item article 
- here's the hospital statement