On the surface, the deal looked like a win-win. Giant Jackson Memorial Hospital would be able to sell--and make some money on--eight years worth of outstanding bills. Collector International Portfolio Inc.(IPI), meanwhile, would make more than $108.6 million on its $5.7 million investment. The thing is, it didn't work out that way, according to IPI, which has sued the 1,757-bed public hospital in an attempt to resolve its problems with Jackson.
IPI is alleging that the $1.9 billion in accounts receivable sold by Jackson wasn't as collectible as it was supposed to be. Its attorneys say that the accounts didn't meet the terms of the sale, including patients who were dead, bankrupt, on Medicare or Medicaid or simply didn't owe what the records suggested. When Jackson got the news, it gave IPI another batch of receivables, but the accounts were only worth $682 million, with many lacking adequate collections information, IPI says.
Since then, the dispute has raged on. Jackson has told many patients with unpaid accounts that they have a zero balance, and has apologized for IPI's collection efforts. Now, it looks like a judge will have to sort things out. In the future, perhaps Jackson will sell accounts for a contingency fee, as is more typically the case when hospitals pursue bad debt collections.
To find out more about the suit:
- read this South Florida Business Journal piece
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