U.S. hospitals provided $45.9 billion in uncompensated care in 2012, totaling 6.1% of expenses for nearly 5,000 hospitals included in a recent American Hospital Association survey. The losses include unpaid bills and charity care.

To ease those losses, hospitals increasingly are reviewing patients' credit scores to help determine how likely they are to pay their medical bills. The idea, according to many hospital executives, is to identify the patients who need help paying their bills so that counseling options about payment plans or charity care can be offered.

Of course, the information also helps with debt collections.

In Iowa, for example, University of Iowa (UI) Hospitals and Clinics recently began looking at patients' credit scores. UI Hospitals paid Experian Healthcare more than $120,000 since last May to pull nearly 100,000 credit scores, according to The (Cedar Rapids) Gazette. UI Hospitals reported more than $100 million in unpaid care in fiscal year 2013. Experian Healthcare works with more than 3,000 hospitals and nearly 1,000 medical practices, according to company officials.

Experian assigns a number between one and five, with one being the best credit, based on a patient’s credit information. Experian provides an estimated income and household size for self-pay patients to see if they qualify for charity care. Patients with twos, threes and fours likely will receive a call from a hospital employee to discuss payment options or counseling.

Experian officials report that credit checks occur after care already has been provided and the credit check is classified as a "soft inquiry," which means checks would not hurt a person’s score, unlike "hard inquiries" made when a person applies for a mortgage or a car loan. Still, the checks are done without patients' permission, and patients won't know about such inquiries unless they review their credit reports.

Consumer advocates have expressed concerns about how such information is being used.

Collections & Credit Risk is interested in your feedback on the practice of reviewing patients' credit scores and/or the help it provides to debt collectors. If you are a medical provider, a health care collector or simply have an opinion on the subject, comment here or contact Darren Waggoner, Editor: darren.waggoner@sourcemedia.com and your comments will not be shared without your permission.

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