Effective this July, sleep subspecialists and dental sleepmedicine practitioners can no longer give patients pre-filled applications or inany way help patients sign up for CareCredit or similar cards in their offices.
By Lisa Spear
After a number of people came forward with complaints accusing medical offices of predatory practices, a new law in California will go into effect this July to prohibit medical and dental providers from signing patients up for deferred interest credit cards in their practices.
“The most common scenario we hear about is from low-incomepeople who signed up for far more credit than they could possibly pay off,”says Jen Flory, a policy advocate at the Western Center on Law & Poverty, asponsor of the bill.
Under the new law, patients will still be able to sign upfor these products on their own time. Medical providers can still market thesecredit cards, but they will no longer be able to help people sign up at theirpractices or to pre-fill out an application for a deferred interest credit cardon behalf of a patient. Providers also will be barred from charging deferredinterest medical credit cards for services not yet performed.
“While third-party financing may have a place when patientsneed services that they cannot immediately pay for, more needs to be done toprotect consumers,” says a statement from Senator Holly Mitchell, coauthor ofthe legislation. “Consumers should not feel pressured into applying for theseproducts and need to better understand what they are signing up for.”
Overall, the law attempts to increase and strengthenconsumer protections around medical debt.
According to information provided by Mitchell’s press office,deferred interest credit cards are most prevalent in offices where services arenot typically covered by a patient’s health insurance, including some sleep specialistsand dental sleep medicine practitioners. In some cases, the services are coveredby Medi-Cal (California’s Medicaid healthcare program), but medical providersfail to bill the appropriate payor, instead foisting high-interest debt onto theirpatients, explains Flory.
The new law stipulates that medical providers who accept Medi-Cal explain to Medi-Cal patientswhat Medi-Cal does and does not cover.
Currently, deferred interest credit cards can be used tocover sleep medicine services, including polysomnography, positive airwaypressure therapy, and hypoglossal nerve stimulation for obstructive sleepapnea. There are as many as 200,000 medical offices and wellness centers acrossthe country that offer deferred interest credit cards through CareCredit.
When the law goes into effect, providers would still havethe ability to offer credit cards that include 0% interest promotional periods,which begin charging interest after the end of the promotional period on theremaining unpaid balance, according to a statement provided by Mitchell’s pressoffice, which also says that people confuse deferred interest with nointerest credit cards. Deferred interest means that if the patient does not payoff entire balance within the no-interest period, then the patient will becharged all of the interest accrued during the deferral period,including on the parts of the balance that the patient has already paid. Notrealizing that they are accruing interest, patients are then shocked to latersee high interest charges later added to their accounts, Mitchell’s officestates.
The new legislation comes after people came to the WesternCenter on Law & Poverty explaining that they did not realize that they hadsigned up for a medical credit card. Others had credit cards opened up in theirnames while undergoing a procedure or medical treatment. Some people said theyhad no recollection of signing up for the card, explains Flory.
Flory says the responsibility of properly explaining howthese credit cards work will still lie with the medical providers. She advisesthat providers advocate for their patients by first educating themselves onwhat these medical credit cards are and the possible repercussions theseproducts may have for their patients.
“Stand up for your patients and keep at it,” Flory says. “Wewould love for deferred interest credit cards to be kept out of the medicalindustry entirely.”
Lisa Spear isassociate editor of Sleep Review.