Dealing with problematic businesses.

Summary: In April I saw a doctor for some minor thing. I get a voicemail 4 months later: turns out under-billed me at the time of service for my copay by $15 and then added $95 in putative fees, and sent me to collections for the grand total of $110. Thinking there must be some mistake, I tried resolving the matter four times via phone, letter, and in person, and they would not be reasonable and withdraw my file from collections and settle the matter for the original $15. In this post, I detail the circumstances of the problem, the concerns I have with this business, consumer interaction with businesses in general, present an analysis, and lay out a potential plan of action. I hope that the analysis and plan will be useful in other contexts and perhaps other people as well.

(The good news: it turns out we consumers aren't quite as helpless as we think!)

The whole story (feel free to skip to Analysis):

Once upon a time in April of this year...

...I had a bee-sting on my big toe, it hurt, and went to see the doctor. I had never been to this particular doctor's office before, but they were local and convenient (I actually live on the same street within walking distance). They are called Seal Beach Family Medical Group. I won't link to there site for reasons that will become clear.

I waited for 2 hours to see someone - par-for-the-course at urgent care, I suppose. The medical care itself was adequate and brief. That wasn't the problem.

The real fun began with the front office.

I paid $25 copay at the time of visit, and thought the matter settled. The next thing I know I get a phone call 4 months later. "Mr. Rehman, you are in arears for $85, if you take care of this within 24 hours, we'll just charge the original $15." Turns out they under-billed me for my copay by $15, then added a $20 late fee per month for 4 months, and were gracious enough to permit me to pay only the $15. Awesome.

So I called them immediately, that evening, to resolve the matter. The office was closed, so I left a message. I didn't hear back. The next thing I know I receive a letter from a collections agency demanding $110 + interest. They had tacked on a $35 collections fee and sent me to collections for total amount. Wow, only $110 for a $15 bill 4 months old? How can they even stay in business charging punitive fees that low?

Needless to say, I was unhappy. The first thing I did was call the collections agency, acting as a prospective client, to see what their terms were. 30%, no fees. No fee to drop a a file if it was submitted to them in error. Good. This meant it would be easy for the doctor's office to do the right thing and just remove my file from the collections agency. (I had a feeling they would try to say it was "impossible" or "expensive" to remove my file from collections. By golly, I must be psychic because that's just what they did! Read on...)

So I went into the office to resolve the matter; the billing manager Emily was not available, and the office manager said that, because my account was in collections there was "nothing I could do, you'll just have to pay the agency". Obviously I needed to talk to Emily.

I went in again to resolve it, just 2 days ago. This time Emily was available. Wow, I felt honored to finally meet her. And she didn't disappoint: just like the office manager, she insisted that I pay the full amount to the collections agency, and that "there was nothing I could do." I told her that, if she wanted to do the right thing, it would be a simple matter to call them and have them stop collecting on my file. This really annoyed her, being called out on her "little white lie" like that. She dug in her heels, insisting that I pay the full amount, and there was nothing more she could do for me.

Analysis

I think, overall, this problem arose out of a combination of problems. The doctor should have asked for the correct copay amount to begin with. That is a very easy thing to get right. Second, they should never have had a policy that charges $20/month on a bill of any amount, especially one that is small. That amounts to over 133% of interest a month, which about 2000% APR. I've never heard of any business, let alone a doctors office, with a billing policy like that. I realize they need to get paid to stay in business, but I this policy is obviously excessive and wrong. And it's embedded in the fine-print boiler-plate that you sign (something the billing manager Emily quite smugly pointed out).

One may argue, as Emily did, that since I signed the form I agreed to everything in there, including the $20/mo clause. However, that argument is flawed because, if it were true, then even if the amount were $200 or $2000 then it would be justified. And that's obviously not true, therefore the premise is false.

I think I did the best that I could. Once I became aware of the problem, I tried to resolve the issue 4 times, on the pone, with a letter and twice in person. They simply would not resolve the matter reasonably, saying that since the account was in collections, there was "nothing they could do", a bald faced lie. So now a billing error on their part, and usurious billing practices, has turned into an expensive headache for me.

Why do I care so much? I mean, given all the major injustice and tragedy in the world, why worry about such a minor issue? Why not just pay it and get on with life? Great questions. I have a theory about the "long tail" of injustice, and I think the actual cost of accepting this petty abuse is higher than $95 (plus interest). People suffer small injustices all the time, those mean petty abuses at the hands of those in power. For example, the petty injustice of bribery is a real and present problem for many people in the developing world. In the US, our injustices tend to be of the petty cruelty sort (authoritarian's drunk on their own small discretionary powers), incompetence (DMV), and the "careless tax" (late fees, street sweeping tickets). Occasionally there's outright systematic fraud. Perhaps more often than anything there is a systematic abuse of individual human beings by mechanistic organizations who penalize people for not being machines themselves. The real tragedy here is that people accept it; they really think they are to blame for not being a machine. A lot of this injustice goes untreated because as a society we are extraordinarily wealthy, and can afford the convenience of just pay and forget. Never mind that an evil person or organization is surviving and thriving because of our need for convenience. What is the hidden cost? By enduring petty injustice, you reward the perpetrators, enabling them to continue their behavior, and empowering them to expand it.

It will always be less convenient to fight than to accept. However, the cost of paying is larger than the monetary amount, especially taken in sum. If that is hard to accept, consider a bank that fudges interest calculations just a little in their own favor. Let's say it only costs a penny a day for the banks customers, but the bank has millions of customers. That means millions of dollars in revenue for the bank. The harm to each individual is very small, but the overall harm is actually very large. The long tail of injustice works like that. And really, citizens of this great country don't have enough tools to right these kinds of wrongs, alas.

What Now?

I think the best course of action is the following: for my own case, I can pay the collections agency the full amount, and then sue in small claims for the amount. For everyone else I can apply what pressure I can to make them change their practices (or go out of business) by reporting this incident and this company and it's practices to anyone I can think of. I'm not sure exactly where I can do that, but I'll keep track of who I complain to here:
  1. File in review Sites
    1. BBB
    2. Yelp
    3. Citysearch
    4. ePinions TODO
    5. complaintsboard.com TODO
  2. Bluecross (my insurance company) TODO
  3. Legal
    1. small claims court the form CA business search corp record handbook TODO
    2. local district attorney TODO
    3. legal counsel TODO
  4. CA Department of Consumer Affairs TODO
    1. Local consumer protection agency (federal list of them) TODO
      1. Consumer/Environmental Protection Unit
        Orange County District Attorney's Office
        401 Civic Center Dr.
        West Santana, CA 92701
        714-648-3600
        Fax: 714-648-3679
    2. legal aid society orange county legal aid TODO
    3. Medical Board department of Consumer Affairs TODO
  5. Voluntary mediation (recommended by one of the state legal guides. I like this idea.) TODO
Any suggestions you might have along these lines is appreciated.

1 comment:

SethAEaker said...

Wow, was that quite comprehensive. Remind me to let you know about what happened with a vendor on Main street that delivered a substandard table - got the mayor, the city council and all troubled by it!