Investigation launched on health care credit cards

The New York Attorney General is investigating health care providers after patients complained about doctors and dentists encouraging them to apply for health care credit cards that saddled them with exorbitant fees. The investigation will focus on a potential conflicts of interest involving financial incentives for health-care providers who convinced patients to apply for several different credit cards.

The Attorney General's office has issued subpoenas to as many as ten health care providers, including some with multiple offices that had encouraged patients to obtain GE Money's CareCredit card. This card had also earned the support of some medical organizations, including the American Dental Association. These organizations are now being asked to explain their endorsements.

Other cards are being looked at in this investigation as well, including Visa Health Benefits, Citibank Health Card, and Chase Health Advance. With all of these cards, providers had encouraged patients to sign up and use the cards for a variety of surgical, dental, and even veterinary procedures that would not be covered by insurance, and would normally be paid for in cash.

According to the New York Attorney General's office, providers earned financial rewards for this behavior.

For example, while the CareCredit issuer charged providers a fee to offer the card, the provider would earn rebates for the amount of money patients charged to the card for procedures. Often, these rebates arrived within two days of the card being used, increasing the appeal to providers to promote the card.

In some cases, patients were not aware that they were even applying to a credit card, and believed instead that they were enrolling in a discount program. In many cases, patients were sent repeated credit card bills with increasing fees, and some even had strikes added to their credit report. The Attorney General's office stated that these high-interest cards were usually marketed without patients having a clear understanding of the terms, and the cards did not have adequate disclosures or protections.

-Seth Berger