At least 10 health care providers used high-pressure tactics to push consumers into using a credit card sold by General Electric to pay for hard-to-insure procedures, an investigation by the New York Attorney General's office found.
More than 125,000 health care practices nationwide accept the CareCredit card, endorsed by top medical associations. They include tens of thousands of dentists, chiropractors, and others offering cosmetic, weight loss, hearing, vision, infertility, and even veterinary services and procedures.
In exchange for pushing the card, providers received kickbacks from CareCredit based on how much business they charged to it, investigators said. In some cases, health care providers claimed the card was a patient's only financing option or that it was better than cash. In hundreds of complaints, consumers said they were told the card carried no interest on balances, when in fact GE charged 25% interest if not paid in full during a promotional period.
The investigation also found that while the card company paid kickback fees in full to providers within 48 hours, they repeatedly gave consumers the runaround when they tried to get money back for unauthorized charges or services and procedures they didn't receive.
"Health care debt is the number one cause of individual bankruptcy, and this scheme is contributing to the economic burden being felt by consumers," said Attorney General Cuomo in a statement. "People are being tricked by misleading offers that have them paying for services they never received as well as interest charges they never knew about."
Cuomo is also asking the American Dental Association, the New York State Dental Association, the American College of Eye Surgeons, the American Society of Plastic Surgeons, and eight other medical groups to explain why they endorsed CareCredit and whether they got paid for putting their seal of approval on it.
One estimate, by the New York State Dental Association, puts the number of dental practices and dental patients that use the CareCredit card at 80,000 and 8 million, respectively.
In one case, a consumer went to a dental provider with a toothache and was convinced to charge $9,000 to CareCredit, despite that he said he could pay in cash. He had the work done elsewhere, but the full charge was billed to his card anyway, investigators say.
In another case, a consumer was told by his chiropractor that he needed two years of treatment, was signed up for a CareCredit card and charged $3,000 without his consent, the atty. gen.'s office said. When he switched to a different provider because the treatments worsened his condition, the practice refused to release his medical records, claiming he still owed them money.
In another complaint, a patient claimed a CareCredit application was "thrown in her face" and that she was charged $5,000 for a procedure that failed multiple times and for which another provider later charged only $1,200.
Cuomo issued subpoenas to 10 health care providers seeking marketing materials, applications, terms of credit, contracts and rebate agreements, policies and procedures, and regulatory inquiries.
They include Allcare Dental Management (Buffalo, N.Y.); American Laser Centers (nationwide); Aspen Dental Management (East Syracuse, N.Y.); East Syracuse Family Dental Arts; Laser Cosmetica (New York City); Lifestyle Lift (Troy, Mich.); Northern Lights Chiropractic and Sunshine Dental (Watertown, N.Y.) S & Y Diamond Dental (Brooklyn); and Toothsavers (New York City).
"Financing can greatly benefit patients when it comes to paying for their dental treatment, provided that they fully understand their terms of the financing program," ADA President Ronald Tankersley said in a statement. "The American Dental Association shares the concern expressed in a letter it just received from the NY Attorney General's office about patient credit financing practices. We will review it and respond accordingly within the specified time frame."
GE Money Bank did not return a call seeking comment.
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