Thomas Donovan, the Attorney General of Vermont has reached a settlement with a healthcare provider that will require the provider to use a professional debt collection agency, while also being barred from collecting certain old debts and paying a fine of $10,000, half of which was suspended because it cooperated in the investigation.
Taconic Orthopaedics, also known as Taconic Spine, was accused of sending threatening letters to patients with delinquent accounts. The letters indicated that if a payment on the debt was not made, that the provider would file lawsuits against the patients to collect on the debts. However, under state law in Vermont, the statute of limitations had expired on many of the debts in question. The provider was accused of sending letters to more than 1,500 individuals across the state of Vermont. The letter informed the recipients that “failure to make payment or contact our office will result in your account being sent to collections which can be escalated to legal action up to and including wage garnishment …”
Along with the penalties mentioned above, the provider is prohibited from attempting to collect debts from patients who have Medicaid coverage for the underlying service that was provided.
In cooperating with the Attorney General, the provider was credited with “immediately” sending a letter to all of the patients who received a collection letter, rescinding the notification that a lawsuit may be filed if the debt was not paid and clarifying the patients’ obligations, according to a release from the AG’s office.