New York Attorney General Andrew Cuomo has launched an investigation into possible predatory lending and kickbacks in the healthcare industry, including some dental clinics that allegedly pressured patients into using GE Money's CareCredit cards.
Cuomo's office has issued subpoenas to 10 New York healthcare providers, including five dental care companies, seeking contracts and rebate agreements, according to a press release. Cuomo alleges that some providers pressured patients into using CareCredit through "fast-talking sales pitches and deceit."
The probe was opened after Cuomo's office received hundreds of complaints from patients. Consumers reported that healthcare providers promised that the credit card had "no interest," when it often carried retroactive interest of more than 25% if not paid in full during a promotional period, the Attorney General's (AG) office alleges. Consumers were also unknowingly charged up front for services they never received, and their attempts to obtain refunds were often thwarted or ignored, the AG's office said.
The investigation also found that CareCredit charges the providers a fee for the right to offer the cards and then rebates part of the fee based on the amount of money the providers generated through CareCredit sales. This kickback arrangement creates an incentive for providers to push consumers to use CareCredit rather than other methods of payment, the AG's office said.
Cuomo has also asked 14 medical organizations, including the ADA, to explain why they endorse CareCredit and whether they are paid to do so.
ADA President Ronald Tankersley, D.D.S., responded that the ADA shares the attorney general's concerns about credit financing practices.
"Financing can greatly benefit patients when it comes to paying for their dental treatment, provided that patients fully understand the terms of the financing program," Dr. Tankersley said in a statement.
CareCredit is accepted by more than 125,000 healthcare practices nationwide, according to the AG's office. The New York State Dental Association claims that more than 8 million dental patients and 80,000 dental practices use CareCredit nationwide.
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