Hospital won’t reveal lawyers’ cut on debt

| 12/02/2018 | 28 Comments

(CNS): The Health Services Authority will not be revealing the percentage rate that the lawyers contracted to chase a million dollars of outstanding debt at the hospital will receive on the money they manage to collect. Officials confirmed Friday that, although the cost to the authority is being capped at $250,000 on this first batch of debt, the HSA will not reveal the agreed rate of commission. Management believes that revealing the percentage that HSM Chambers, the firm that won the contract, will get could undermine future tenders for the rest of the hospital’s significant debt.

Although the hospital is subsidised by public funds and the management accepted that the public has a right to know, officials said the authority also “has a statutory obligation to balance those fundamental tenets with the commercial interests of the organisation as it strives to achieve value for money in its procurement activities”.

The hospital is hoping that the local law firm can recover the debt from those believed to have the means to pay what they owe and that, if necessary, they will chase the indebted patients to the courts. Although the hospital has stated that the cost of chasing the first million will not exceed $250,000, officials would not confirm if the lawyers’ cut will be 25% in all cases. It also appears that any costs incurred taking clients to court will be in addition to that sum.

“The HSA’s goal to ensure value for money is the premise behind our decision to defer disclosure of the exact commission percentage associated with the current HSM debt collection agreement,” the hospital management said in a statement sent to CNS following our inquiries about the contract, which deals with just a small proportion of the debt owed to the hospital.

“As previously explained, the HSA considers the potential pursuit of outstanding debts via the courts as a pilot initiative. Consequently, the existing contract with HSM is for less than 1% of the overall amounts owed to the organisation. This strategy is scheduled for review in less than six months.”

Officials said that after that review, a much larger percentage of the current outstanding debt could be outsourced for collection as part of another competitive public tendering process.

“If this were to happen, disclosing the commission amount that is being paid as part of the pilot project would prejudice the competitiveness of that process,” the hospital stated. “A disclosure at this point could also prejudice the commercial interests of HSM by disclosing their pricing strategy to potential competitors in a future tender, and diminish the HSA’s negotiating ability with other potential service providers.”

The HSA said it was deferring the revelation of the exact percentage until further decisions are made about whether or not it will continue this strategy as a means of pursuing the outstanding debts.

The hospital has been plagued with debt for some time as a result of the failures in the local healthcare market, with many people either under-insured or not insured at all. The hospital has a policy of treating all those in need and then pursuing payment. While local indigent people can access CINICO via the Needs Assessment Unit, it is often not until people are in need of care that their lack of cover becomes apparent.

Government has spoken about reviewing and fixing the private sector insurance market, which, despite some changes to the legislation, is still able to cherry pick, leaving the government’s insurance company to pick up cover for the elderly and the sick and the public purse to cover the hospital’s deficit.

During the Finance Committee hearings on the 2018/19 budget last November, the premier said the system was failing the people “terribly” and the provisions for health cover were grossly inadequate”, and that subsidising the failing market in healthcare would eventually break the government’s finances.

The opposition has called on government to move towards a single payer system after CIMA revealed that the private health insurance sector generated a profit or more than $51 million at the end of 2016.

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Category: Health, Health Insurance

Comments (28)

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  1. Anonymous says:

    So I have health insurance but the HSA didn’t get around to submitting the claim until after 6 months had elapsed from date of service. My insurance company now won’t pay. The hospital say that I owe the money but it is due to their incompetence that they haven’t received it. Do I have to pay?

  2. Anonymous says:

    Man the ignorance on here simply astounds me, so much talk about what you people clearly know nothing about. As they saying goes, none so blind …

  3. Anonymous says:

    Since the public has the right to know how is it that the HSA has decided to withhold the information from us then? Sounds like this deal STINKS to high heaven. Bet you there is something in that whole transaction that is hiighly suspect and or conflicted. HSA we want to know what kind of deal you got to recover our funds. Why you hiding behind all them fancy worDS? You think we fool or wha? ?

  4. Anonymous says:

    And that is why healthcare should be a public service.
    A right and not a product you buy.

  5. Anonymous says:

    CNS, the article says “the Hospital stated” or “Management said”, who is the Hospital or the Manager that said these things? We assume it is Lizette Yearwood.

    Also, any future contracts will be publicly tendered right?

    And those tenders may come in below OR above this contract price or commission rate right?

    So whats the big deal in releasing the contract rates?

    Is the HSA saying they know what the future outcome will be if they release the rates?

    If so, please tell me what this weeks lotto numbers are.

  6. Anonymous says:

    Your outstanding bill if 200$ will be presented to you by these laywers at 300$.
    It is a sick Americanized society.

  7. Kadie says:

    We have local debt collectors why not spread the money around? Isn’t this the same law firm that is representing a number of PRs through the courts? How can they be taking government to court, yet work for government?

  8. Anonymous says:

    The HSA is taking a logical prudent decision on this, they’ve already disclosed the maximum exposure, why do you need the exact percentage?

    If they disclose that now before going back to market for the big tender then everyone will know what to bid and it would make it difficult for them to negotiate an even better deal.

    Sometimes una so fast una willing to cut off una nose to try and spite una own faces.

  9. Anonymous says:

    Did HSA CEO Lizette Yearwood and Chief Officer Jennifer Ahern of Ministry of Health read the contract this time before the deal was signed?

  10. Anonymous says:

    Just to keep the lasers feed down, I will continue to not pay my outstanding balance.

  11. Jurisprudence whisper says:

    The question is who exactly in government directly benefits this very sweet deal. This non disclosure is but a mere smokescreen to divert the public attention from the players involved. Unity government is united when it comes to fleecing Government and its coffers.

  12. Anonymous says:

    If they send me another bill that has already been paid, they will be sent a bill in return for wasting my valuable time.

  13. Anonymous says:

    Three early posters seem to think that people should work for nothing…are we in Venezuela?

  14. Dr. Phil says:

    This government do not understand or live by the principles of transparency and accountability. How can the HSA management be trusted after Care Pay to negotiate any contract fiasco?

  15. Tut alors!. says:

    We can be sure then that the lawyers are getting 25%, but to add their expenses which will not be capped, on top, is absoluteley ridiculous. In theory with smaller claims this could mean that the lawyers will get everything and the Govt. nothing.

    • Anonymous says:

      In smaller claims, the government will owe the lawyers. Trust me.

      • Anonymous says:

        When Cinico was set up it was with the understanding that it would become the Cayman National Insurance Company as the name implies. Why after all this time governments have not moved to a single payer system is mind boggling. Everyone on the island should be covered by Cinico and if anyone wanted a private insurance along with Cinico then that would be their decision. As it is Cinico is only getting the poor, retired, indigents, and the government workers. Government can change the insurance law or continue bailing out the HSA. One thing they dare not do is to leave its people to drop dead in the streets for lack of health care. It is that simple. Protect the money grabbing private insurance companies or make Cinico a viable insurance company.

    • Anonymous says:

      We all know that lawyers receive payment no matter the results. Therfore the HSA will have to pay them whether they collect on those delinquent debts or not. Send a letter of demand and bam, they have to get paid. A bloody good deal for the law firm a bad one for the HSA.

      • Anonymous says:

        Why the HSA hiding how much they paying the lawyers? Is it such a bad deal that they have to cover it up? And who else bid for it? Was it that giving the contract to the law firm makes no sense. FOI anyone??

  16. Anonymous says:

    Total bs keeping the fees secret. Guaranteed to cost more than public bidding.

    • Anonymous says:

      Of course you know the decision to keep the lawyers cut secret was the decision of the lawyers. I cannot believe that the HSA fell for this. I am fully aware that they have millions of dollars in outstanding fees but is the HSA even aware that they are going about this in a uninformed manner because they are consistently sending out invoices for amounts that have been paid. Are they aware that they do not know how much is outstanding? At the end of the day they might owe the lawyers more than they collect. I hope the contract states that they will pay them a percentage of what is collected and not what is owed.

  17. Anonymous says:

    In my industry (not healthcare) the normal for a recovery would be circa 20% of amount recovered. These guys have to do a lot of work to get paid, including probably taking on hopeless recovery cases, and cases where the people have actually paid and so will not recover anything. Not sure this is much of a story.

    • Anonymous says:

      Not the case if they being paid for effort and not performance. Different kettle of fish Bobo.

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