When you stumble into the emergency room, you want the hospital focused on your health instead of its own bottom line.

But a new trend in hospitals suggests a dangerous turn for the health-care industry.  Hospitals are outsourcing management of their “revenue cycles” to debt collectors embedded among hospital personnel to confront patients about payment, sometimes before receiving emergency treatment.

At least one firm, Accretive Health, Inc., contracts with hospitals to take over day-to-day revenue cycles to collect more money from patients and to provide real-time diagnostic assessments from far-off doctors regarding such things as “whether to classify a hospital visit as an in-patient or observation case for billing purposes,” according to Accretive’s 2011 annual report.  The company also takes steps to “educate the patient as to his or her potential financial responsibilities before receiving care”—in other words, to focus a patient on what the care will cost and probably to provide a not-so-subtle reminder that the hospital has some muscle on its payroll.

The New York Times recently spotlighted Illinois-based Accretive by reporting that the Minnesota attorney general is raising concerns about sharp practices by its debt collectors in hospitals.  Apparently debt collectors working in Accretive’s client hospitals are approaching patients before receiving treatment, or at their bedside soon afterward, to demand payment.  They don’t necessarily reveal themselves to be third-party debt collectors, so patients may mistake them for hospital employees—a practice that may violate state and federal laws if true.

Accretive’s business model makes confusion almost inevitable.

“Once implemented,” boasts Accretive’s investor materials, “our technology applications, processes and services are deeply embedded in a hospital’s day-to-day operations.”

Accretive goes on to advertise that “hospital customers transmit pertinent data about the case at hand to our physicians who then leverage our proprietary diagnosis guidelines and the extensive information within our knowledge database to reach an informed classification judgment.”

Some critics have alleged that this access to patient records may violate federal privacy laws.

Personally, I don’t like the idea that my doctor may be influenced by some corporation’s “proprietary diagnosis guidelines” or “knowledge database.”  And if a debt collector asks me for my credit card before my kid can get stitched up, someone else might need medical attention.

Doctors at one hospital under an Accretive contract complained that strong-arm tactics “were discouraging patients from seeking lifesaving treatments,” according to the New York Times.

Maybe Accretive is just acting like the free-market animal it is, and it certainly considers itself the future of hospital management—perhaps correctly.  Strapped by increasing bad debt and market and government forces, hospitals are looking for better ways to squeeze patients or curb expensive care for those less likely to pay.

Although Accretive may not yet be serving a hospital near you, its success as one of the nation’s largest collectors of medical debts could herald trouble for consumers.  No longer do insurance companies reign as the dominant boogey-man in financially-driven health-care decisions; we have another player whose mission is to collect more from you while helping hospitals to provide less.

Accretive implicitly blames insurers and government payers like Medicare for creating a need for these services: “Hospitals are being forced to adapt to the need for direct-to-patient billing and collections capabilities as patients bear payment responsibility for an increasing portion of healthcare costs. Hospitals have traditionally focused on collecting payments from insurance companies and from state and federal payors, and typically are less familiar with the processes necessary to collect payments from patients at the point of service, including the use of alternative payment options.… Moreover, hospitals generally do not utilize consumer segmentation techniques to formulate effective revenue collection approaches to patients.”

That last bit no doubt is corporate-speak for something scary.

Interestingly, Accretive predicts growth resulting from the federal health care reform that became law in 2010 and is now largely in the hands of the Supreme Court.  Accretive says those reforms “may create new business opportunities for us by increasing the need for services such as those that we provide.”  The changes, Accretive predicts, “may cause some healthcare providers to turn to outsourcing to extract more value from their existing revenue cycles and could generate more interest in our physician advisory as well as quality and total cost of care service offerings.”

So despite much fretting in certain political quarters that the government is taking over health care, it turns out that health-care reform may actually open up markets for the private sector.

That shouldn’t be surprising. Squeezing the average American is a growth industry these days.

Over the last few years, this firm has substantial experience assisting developers in lender liability claims and loan modifications with various banks.  A few banks are actually pretty easy and reasonable to work with and understand that the economy is in a state of rescession that most of us have never seen in our lifetime.  The majority of banks are not necessarily easy to work with but normally make a decision that is in the best interests of everyone, although that often takes some time.  Then there are banks that have a “scorched earth” mentality where they won’t agree to anything reasonable and would in fact prefer to get judgments and have people file bankruptcy.  While the incentive for their lawyers to have that mentality is obvious, the same can not be said for the bank.

Well, how do banks make money?  Banks make money through issuing loans.  For most banks, they make their money through providing commercial real estate loans.  These commercial real estate loans are given to the developers above.   Does anyone else see a problem with this? If banks adopt a “scorched earth” mentality to litigation they are going to ensure the following: (i) that the developers upon which their profits are based will never do business with them again, and (ii) that anyone those developers know will never do business with that bank because of the manner in which the bank acted.  Accordingly, even if the Bank is found to be right about all the legal aspects of the case the bank may eventually win the battle (which will likely result in the Bank not recovering anything for their efforts except a bill from a large law firm due to bankruptcy filings) but will lose the war.  Why cut a developer’s line of credit or not extend a loan on reasonable terms when it’s possible, especially when you’re receiving TARP money to do just that?  But instead banks often call loans due at the worst time possible in which to sell commercial property.  Not only is it aggressive but it’s just plain stupid and fails to see the “forest for the trees.”

As “scorched earth” banks will find out, you may win the battle but in the long term you’re going to lose the war and your profits to banks who dealt more amicably with developers

On July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act became law, and imposed new regulations on mortgage lenders. As if small business’ access to credit wasn’t bad enough, commercial lenders are predicting that other regulations, specifically Section 1071 of Dodd-Frank, will bring lending to small business to a halt. Section 1071 of Dodd-Frank amends the Equal Credit Opportunity Act to require creditors, including financial institutions, to collect and report data on women and minority owned business, and small business. While the new regulations do not take effect until the newly formed Consumer Financial Protection Bureau (CFPB) creates the reporting forms and issues regulations on implementation. Banks are already starting to make the argument that Section 1071 exposes banks to more risk in potentially being required to provide otherwise private information. Bankers argue that commercial lending, unlike mortgage lending, isn’t a “one size fits all” transaction, and that Section 1071 does not provide banks with the needed flexibility to continue to make loans to small business, and structure a transaction in accordance with an individual borrower’s needs and/or risk. That’s just what small business needs right now – less access to credit! At a time when banks are already having an adverse effect on small business due to aggressive collection practices by banks, Section 1071 of Dodd-Frank will simply give banks a further excuse to wreak havoc on our economy.

Prior to 1996, State regulation of activities in wetlands areas was very limited.  Wetlands protection under state regulation is principally through section 401 of the Federal Clean Water Act.  This section requires that “[a]ny applicant for a Federal license or permit to conduct any activity . . . which may result in any discharge into . . . navigable waters . . . shall provide . . . a certification from the State . . . that any such discharge will comply with [[state effluent limitations and water quality standards].” If a property owner cannot get the required certification from the State, it is virtually certain that there can be no issuance of the required federal license or permit.  The Federal Environmental Protection Agency (“EPA”) has traditionally taken the position that section 401 applied to wetlands because wetlands were “waters of the United States, and therefore mandated States to include wetlands within the scope of water quality standards required under the Clean Water Act.  North Carolina’s water quality standards relating to wetlands have been in place since 1996, and substantially affect the use of property within this State.

However, North Carolina’s jurisdiction over wetlands are no greater than those of the United States (“[w]etlands classified as waters of the state are restricted to waters of the United States”), and since the United States Supreme Court’s opinion in Rapanos v. United States, 547 U.S. 715 (2006), the term “waters of the United States” has a far more limited definition, jurisdictionally, than North Carolina, the United States Army Corps of Engineers, and other agencies had theretofore enforced.  Today (and according to the United States Supreme Court, such has always been the legislative intent under the Clean Water Act), in order for land to be properly characterized as a wetland within the jurisdiction of either the State or the Federal government, a wetland that otherwise meets the soil and hydrology requirements for such a classification, must “possess a ‘significant nexus’ to waters that are or were navigable in fact or that could reasonably be so made…Accordingly, wetlands possess the requisite nexus, and thus come within the statutory phrase ‘navigable waters’ if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical and biological integrity of other covered waters more readily understood as ‘navigable.’  When, in contrast, wetlands affects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term ‘navigable waters.’” 

Notwithstanding Rapanos, the broad reach of the State of North Carolina over isolated, fresh water wetlands continues.  Wetlands classifications undertaken prior to 2006 should be revisited.  Accordingly, enforcement determinations made both before and after 2006 should be thoroughly analyzed, and given their effect on property, litigated, if necessary.  We have helped property owners who have been the victims of overreaching by both the State and Federal governments, and there are remedies that are available.

April’s tax deadline is rapidly approaching.  It is time to file, but many people find reasons not to. According to CNN reports an estimated ten (10) million people were expected to file their tax returns late. People have countless reasons and excuses for filing late or not filing at all. However, most common excuses are not useful. Below are the most frequently used reasons for filing late and not filing:

1.      Laziness:  It’s easy to not do something.  But this is not a valid excuse according to the IRS. 

2.      Death or Serious Illness:  The IRS grants some leniency in recognizing this as a legitimate reason for filing late.  However, it must be legitimate.

3.      Forgetfulness: Related to laziness, but again if you forget don’t expect the IRS to forgive.

4.      Destruction of Records: IRS may be lenient to taxpayers that can prove their records have been destroyed. The IRS will want to confirm the legitimacy of this excuse.

5.      Don’t Know How: A tax return can be complicated and confusing.  If this is the case see a professional as ignorance is not an excuse.

6.      Active Duty Military Service: May be eligible for extensions.

7.      Belief that you don’t have to file of taxes are voluntary: This is a scam, please don’t believe this myth.

Uncle Sam has set a deadline for relief of a short sale or foreclosure without tax consequences on their primary, and in some cases secondary, residences.

Generally speaking cancelled debt refers to any money you have borrowed from a lender that you do not have to repay because the lender “forgave” the amount owed.  Lenders are required to file a 1099-C Cancellation of Debt form whenever they forgive a debt greater than $600. This form is filed with the IRS and a copy is sent to the borrower. The form will show the amount of cancelled debt as well as any interest forgiven on the debt.  For example, if you owe $600,000 on your mortgage and the house is sold in a short-sale for $300,000 and the bank forgives the remaining $300,000 owed on the loan, that $300,000 is cancelled debt.

Under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers may exclude debt forgiven on their principal residence as income. This covers debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure.

Up to $2 million of forgiven debt can be forgiven this year, $1 million if married and filing separately, according to the IRS.  Homeowners declaring bankruptcy could escape paying income taxes on any cancellation of debt income if the debt is forgiven in the bankruptcy even if the debtor is solvent. 

While there are other exemptions available on January 1, 2013 the rules change and the amount a lender forgives will be taxable.  It is very important to remember that cancelled debt still must be reported to the IRS or the excluded income could have other tax consequences. It is always best to consult with a tax attorney or CPA for more information on this issue.

Read more at: http://www.irs.gov/irs/article/0,,id=179073,00.html