Chiropractic Clinic Accused for Predatory Lending
Involving Health Care Credit Cards

Minnesota Attorney General
Press release, August 12, 2009

Minnesota Attorney General Lori Swanson and the Minnesota Board of Chiropractic Examiners today filed a lawsuit against a Minnesota chiropractic clinic that enrolled patients in health care credit cards without their permission and then placed charges of up to $5,040 on those credit cards without patients’ consent.

A health care credit card is a credit card that can be used by patients to pay for certain expenses not covered by insurance. In recent years, many of the country’s largest financial institutions have begun to sell health care credit cards to patients, capitalizing on rising health care costs and gaps in insurance coverage. According to a report by McKinsey & Company, consumers currently charge about $45 billion in out-of-pocket medical expenses on credit cards, and that number is estimated to triple to $150 billion by 2015.

The lawsuit was filed against Express Health, P.A., a Minnesota chiropractic clinic, and its owner, Cory Couillard, D.C. The lawsuit alleges that Express Health and Couillard aggressively enrolled patients in the CareCredit Credit Card offered by GE Money Bank, convincing some patients to complete applications by telling them that they were not applying for a credit card but that the clinic simply wanted to check to see if they would qualify for credit. The lawsuit alleges that, unbeknownst to these patients, Express Health and Couillard then submitted the application to GE Money Bank, which issued a CareCredit credit card in the patient’s name. The lawsuit also alleges that, in order to ensure that patients qualified for a credit card, the defendants sometimes submitted to the lender false annual income for patients, in some cases doubling or more patients’ actual income. Once patients were issued a credit card, the defendants placed lump-sum charges of up to $5,040 on the credit card, without patients' knowledge or consent.

"The clinic engaged in predatory lending, only with health care credit cards instead of subprime mortgages," said Swanson. "The clinic jeopardized patients' credit ratings by fraudulently signing them up for credit cards and then charging their accounts thousands of dollars," she added.

GE Money Bank, the nation's largest issuer of health care credit cards, describes the CareCredit Credit Card as a "health care credit card that can be used as a payment option for certain expenses not covered by insurance or to bridge situations when desired care exceeds insurance coverage." If a patient does not pay back the amount borrowed on a CareCredit credit card on time, default interest rates of up to 29.99% apply.

The lawsuit alleges that Express Health and Couillard aggressively signed patients up for credit cards in order to create a lucrative source of funding for their chiropractic services, jeopardizing patients’ credit histories and finances and causing patients to pay for care they did not want and to incur late fees, interest, and other financial consequences.

In some months, the clinic charged $30,000 or more in monthly chiropractic charges to CareCredit. In the two-year, five-month period between December, 2006 and April, 2009, the clinic charged $560,850 to CareCredit credit cards issued to its patients. About one-half that amount was later refunded by the clinic to patients who complained.

"No consumer should have to be the victim of health care fraud by the health care providers in whom they've placed their trust. The Minnesota Board of Chiropractic Examiners considers health care fraud to be a serious matter and will thoroughly investigate complaints and take appropriate action in any case where such action is warranted," said Larry A. Spicer, Executive Director, Minnesota Board of Chiropractic Examiners.

Swanson also today issued a Consumer Alert cautioning patients to be wary of high-pressure sales pitches in which they are marketed health care credit cards by clinics. She said that, in recent months, her Office has received complaints from patients involving a number of providers and lenders about a variety of practices associated with health care credit cards. She said that chiropractors, dentists, medical clinics, cosmetic and eye surgeons, weight loss programs, hearing aid dispensers, and other providers sometimes aggressively promote health care credit cards as a way to make money for their clinics but that the credit cards may not always be in the best interests of patients.

"A clinic's primary interest in marketing health care credit cards as a sales agent for the lender is to boost its bottom line. This may collide with the best interests of the patient, particularly when the credit cards come with high interest rates and high fees," said Attorney General Swanson.

The Attorney General said that many health care credit cards are marketed with zero-percent interest rates that can jump to nearly 30% retroactively if the patient misses a monthly payment or does not repay the balance within a certain time period. In recent months, she has heard from patients who:

The lawsuit against Express Health and Couillard was filed in Dakota County District Court. It seeks an injunction, restitution, and civil penalties.

This page was posted on August 13, 2009.

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