RIP Medical Debt and the Push for Single Payer

In countries with single payer health care, there are no bankruptcies due to medical debt.

rip

That’s because there is no medical debt in countries with single payer national health insurance.

In the United States, fully sixty percent of personal bankruptcies are due to medical debt.

Now comes RIP Medical Debt.

Created in the wake of Occupy Wall Street, RIP Medical Debt buys medical debt in bulk for pennies on the dollar and then forgives the debt.

The founders of RIP Medical Debt are a former insurance industry executive —  Robert Goff — and a retired former debt collector — Jerry Ashton.

“Among the more egregious practices in the collections industry is the sale of old medical debt – for pennies on the dollar – to bill collectors who will then aggressively pursue this debt at full face value for an additional two to ten more destructive years,” Goff says. “This is regardless of the personal circumstances of people who clearly are still struggling with the economic consequences of illness and accidents.”

RIP Medical Debt was created eighteen months ago in the wake of Occupy Wall Street — to locate medical portfolios, buy them, and forgive them.

“We know that we are not alone in our concern for those needing medical care but unable to pay the resultant bill and that many people are left with financial stress that can endure longer than the physical harm done by illness or accident,” Goff says. “But we also knew that it was difficult to gain a national awareness.”

That changed in June 2016 when comedian John Oliver took charge. Oliver spent $60,000 to buy $15 million in medical debt — then donated the debt to RIP Medical Debt — which promptly forgave it.

“Thanks to this June 5 airing of the HBO comedy series, Last Week Tonight with John Oliver, there are a lot more of us now privy to this collection industry practice and the debt treadmill it creates,” Goff says. “In a painfully hilarious piece, John Oliver triumphantly out-Oprah’s Oprah in giving away valuable gifts.”

Ashton and Goff have now written a book on the subject titled — The Patient, The Doctor and The Bill Collector: An Obamacare and Medical Debt Collections Survival Guide.

Ashton says that there are wide differences in politics and life experiences between the two.

“One thing we do share in common is an extreme dislike for the system as it is and feel that our differences only make our arguments stronger,” Ashton says.

One area they disagree on is the need for single payer. Ashton favors it, Goff — not.

“Jerry is a supporter of single payer,” Goff told Corporate Crime Reporter in an interview last week.

“I am not. Single payer or Obamacare just changes who pays the bill. The reason we are arguing about who picks up the tab is that nobody wants to deal with the fundamental question — how do we reduce the cost of delivering care in this country? There is no reason it should be as costly as it is. We have an infrastructure that is not designed to deliver care faster, better and cheaper.”

If not single payer, what is Goff’s solution in a nutshell?

“My nutshell solution is a more difficult one — a redesign of the infrastructure supporting the delivery of healthcare and proper public health,” Goff said. “Flint, Michigan will cost the healthcare system millions and millions of dollars. That’s a public health disaster that is going to show up in healthcare costs.”

“We have a surplus of hospitals. We are using hospitals as a jobs program. We are a specialist driven medical system. We do not have sufficient primary care and first line specialists.”

Why not both — single payer and structural solutions to reduce the costs of medical care?

“Historically, this country looks for ways of burying the problem and not confronting the problem,” Goff said. “If we move to single payer, every dollar that goes in will be used to support the existing infrastructure. And it will not change in the right direction. Politically the pressure will be to cut the spending. And the spending cuts will eliminate alternatives to hospitalization, it will be at the expense of creativity and new innovation. The single payer dollars will be used to support the existing structure and not to change it.”

Do you agree that single payer eliminates medical debt?

“Yes. But the single payer or Obamacare issue would not exist if the costs of health care services were not as high as they are. People are arguing for a way to pay for the healthcare services. I’m saying — it shouldn’t cost what it costs. If it were reasonable, if people believed there was value for the dollar being paid, we would turn around and not be pushing back against the cost.”

“My fear is that single payer protects the status quo, including the drug companies,” Goff said. “If it’s single payer, the lobbyists are going to try and protect the pharmaceutical industry even more. Look at Obamacare. We do not allow the re-importation of drugs. Why? That was part of the deal to pay off the pharmaceutical companies for their support of Obamacare. Single payer is single control. It sounds good. If I were the benevolent dictator of single payer, I would be happy to support it.”

The book is about, as the subtitle puts it,  “An Obamacare and Medical Debt Collections Survival Guide.”

“Obamacare gave people the sense that they were going to be protected,” Goff says. “That is the way it was sold. Yet in fact, they are not protected. And it’s not just a matter of the poor. It’s a matter of the middle class. That is the concern that comes out in the book.”

“The book’s message is — you are at risk. You need to understand that you are at risk. We go into examples of abuse by physicians in the industry. Out of network is one big issue. We are seeing patients who are being abused. New York State has passed something called the surprise bill law — but most states have not passed this law.”

“This has to do with physicians misrepresenting their participation with health plans. The patients go to the doctor. The bill is exorbitant. And the doctor says — hey, guess what, you have a balance due. Your insurance only paid me so much, you owe the balance. The patient says — I thought you participated in my insurance? No, we accept your insurance, but we don’t accept it as full payment.”

“There are situations where there are actually scams. Aetna came across a neurosurgeon who participates with Aetna. And he would bring in his associate who is not participating. The non par guy sends in incredible bills — like three times what the guy who is contracted is paid. Aetna, to its credit, ended up suing the physician for this scheme. But that all builds into premium and health care costs.”

Do the doctors or the hospitals abuse the system more?

“The hospitals who engage in inappropriate practices are large institutions. But the doctors together are big players also.”

If you were to put a percentage on total abuse of the system, what would you say?

“Sixty percent hospitals, forty percent physicians. Trying to load the debt onto the patient, or set the patient up so that the insurer will come in and rescue them by paying the bill or leave the patient hanging. In New Jersey there are some proprietary hospitals who take no insurance whatsoever. Under law, if a patient is in the emergency room, the health plan has to cover the bill.”

“I have seen clinical laboratory companies who will tell the doctors — we will take all of your patients regardless of insurance. Their bills will be multiple times what is contracted, and they will write off the portion that the patient has to pay. The insurance companies end up picking up that tab. And it all ends up in premium.”

“Just went through a situation with a physician. Every time he saw a patient, he sent out a bill for his time. And he would also send out a second bill under another company name as if he had done the work in a licensed ambulatory surgery center.”

Isn’t that straight out fraud?

“Yes.”

And isn’t it being criminally prosecuted?

“In my opinion, not to the extent it should be.”

What percentage of medical debt is driven by fraud?

“I have no idea. It’s not so much fraud driven as gaps in insurance that the patient is unaware of — such as deductibles and out of network. I have never seen a number that is presented as a percentage of debt being related to fraud. There is fraud and there is waste.”

“For example, hospitals will buy a medical practice. The medical practice, which was a private practice, now is billed out as if it is a hospital outpatient clinic. The costs will rise dramatically. Same doctor. Same location. But because of the contracts that they have, they are able to bill out at much higher rates. Is that fraud? Or is it just inappropriate structure?”

“I was talking with the vice president at Blue Cross or Blue Shield. Her comment to me was — every time a hospital buys a physician practice, the medical costs go up twenty to forty percent. They are not doing it fraudulently. They are just taking advantage of contracts.”

Do you have clients who are insurance companies?

“No. But I founded an insurance company. I do business with them.”

What insurance company?

“Wellcare. And it is still in business.”

Do you still have ownership in Wellcare?

“No. They are now multistate, publically traded.  I have been out of that business for 25 years.”

When did your book come out?

“We released the book in March. The most interesting play has been bulk purchase. Bulk purchases are being made by physician organizations for their physician membership.”

[For the complete Interview with Robert Goff, see 30 Corporate Crime Reporter 38(12),  September 3, 2016, print edition only]

 

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