N.Y. Attorney General Investigates Health Care Credit Cards For Possible 'Predatory Health Care Lending'

MarketWatch: "New York Attorney General Andrew Cuomo said Monday he is expanding an investigation of health-care credit cards by issuing subpoenas to clinics that promote cards from J.P. Morgan Chase & Co. and Citigroup Inc. On Wednesday, Cuomo subpoenaed health care providers that promoted CareCredit, a health-care credit card offered by General Electric Co.'s GE Money" (Witkowski, 8/10).

Bloomberg: "Last week, Cuomo announced an investigation into what he called 'predatory health care lending' where consumers were allegedly misled about financing terms for health-care credit cards." Cuomo said: "Patients are being misled into paying for services they never received by the people they should be able to trust the most -- their doctors." Cuomo said he has issued subpoenas to 14 dental and health care clinics. The subpoenas seek marketing materials, applications, terms of credit, and contracts" (Freifeld, 8/9).

The Wall Street Journal: "Mr. Cuomo says some health-care providers are using 'fast-talking sales pitches' to pressure consumers into applying for health-care credit cards, including those offered by Chase, Citi and GE. … Mr. Cuomo says health-care providers are charged a fee for the right to offer the cards and then a portion of the fee is rebated to them based on the amount of money generated through CareCredit sales. He says this amounts to a 'kickback arrangement.' The attorney general also said health-care providers are paid within 48 hours of the charge, creating an incentive for them to use the cards, rather than other methods of payment" (Bray, 8/10).

Crain's New York: "Doctors and dentists may also avoid negotiations with patients over prices of services by simply telling them to put their bill on a medical credit card 'even when these are patients who might otherwise qualify for charity care,' he says. … In a recent Consumer Reports investigation into the industry, the magazine's researchers cited a McKinsey & Co. study that predicted the amount charged on these cards nationally could reach $150 billion by 2015. … A spokesman for CareCredit says the company 'is fully cooperating with the attorney general, and we hope to learn more'" (8/10).

Fox Business: "The attorney general said Monday that consumers, seniors and vulnerable patients in particular, are misled about financing, and subsequently pushed into debt" (Booton, 8/9).

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