Hospitals keen to get your credit report information

In a development that consumer groups say raises privacy issues, a growing number of hospitals are mining patients' personal financial information to figure out how likely they are to pay their bills.

Some hospitals are peering into patients' credit reports, which contain information on people's lines of credit, debts and payment histories. Other hospitals are contracting with outside services that predict a patient's income and whether he or she is likely to walk away from a medical bill. Hospitals often use these services when patients are uninsured or have big out-of-pocket costs despite having health insurance.

Hospitals say the practice helps them identify which patients to pursue actively for payment because they can afford to pay. They say it also allows them to figure out more quickly which patients are eligible for charity care or assistance programs.

Administrators also argue that these credit checks can help them minimize losses. In 2006, nearly 5,000 community hospitals provided uncompensated care costing $31.2 billion, the vast majority of it charity care or unpaid patient bills, according to the American Hospital Association.
Consumer advocates say the practice creates the potential for hospitals to misuse the information by denying or cutting back on patients' care if they can't pay.

Hospitals say that doesn't happen. Hospitals often ask patients for permission to access their financial records, but such authorization is sometimes buried in the fine print. What's more, hospitals could scour a patient's financial records for credit lines and encourage the patient to tap them, despite high interest rates or other costs.

"It has the potential to put people at risk financially," says Mark Rukavina, executive director of the Access Project, a research and advocacy group that focuses on medical debt. Consumers' credit reports are maintained at the three major credit bureaus, which determine credit-worthiness using criteria such as the well-known FICO score. But while a snapshot of how much credit you have available and your debt-payment history might help predict the likelihood of your repaying, say, a car loan, it's less reliable when it comes to medical-bill payments.