Medical Debt Collector or Patient Assistance? Nonprofit’s Model Raises Ethical and Legal Questions

Hospitals are donating unpaid debt to a Tulsa-based not-for-profit that claims to connect patients with social services including housing help, food assistance, transportation, addiction treatment or credit counseling.

At the same time, the company partners with a debt collector, an arrangement some experts say seems dubious.

A relatively new operation with ambitious growth plans, Center for Consumer Recovery convinces hospitals to donate medical debt they’ve already run through their own collection processes and deemed uncollectible. CCR promises to send 20% of collection proceeds to a charity of the hospital’s choice, which could include the provider’s own foundation.

Several healthcare industry and debt collection specialists interviewed for this article said they’re concerned about what CCR is doing. They worry it will further stress patients who’ve already been hounded by debt collectors and dissuade them from seeking future medical care. And even though CCR’s leaders insist multiple lawyers have signed off on the operation, it still raises important ethical and legal questions.

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