Every year, thousands of small claims and civil court cases are filed in South Dakota to collect medical debts.
Many of those cases contain an itemized list of the medical procedures for which a hospital, doctor or clinic is seeking payment, and that list is a public record.
That means that once confidential medical information becomes part of a lawsuit, that information no longer is strictly confidential. The type of procedure, date or dates performed and the treatment – which doctors would be legally liable for releasing to the public under other circumstances – all become public and available for scrutiny once a case goes to collections.
Now, with the advent of electronic filing, that information is available at public terminals in courthouses across the state. By the end of the year, you may access case records online, although the system won’t allow you to search by name only.
Electronic, online case records have made the always-thorny discussion of confidentiality more pressing for court administrators and collections agencies in the state, which have grappled for years with the question of how to protect the patients who haven’t paid.
“It’s a discussion we’ve been having for a long time,” said Karl Thoennes, administrator for the 2nd Judicial Circuit. “I don’t know that people realize how much information there is in these files.”
At least one collection agency in the state has moved to change that.
AAA Collections, a Sioux Falls-based agency that handles cases for Sanford Health, began asking more than a month ago that medical information be sealed in new case filings.
As the state moves nearer to mandatory e-filing of all civil and criminal cases, said AAA general counsel Sara Greff Dannen, the agency wanted to provide an additional layer of protection for private patient data.
“AAA Collections strives to be on the cutting edge of its industry,” Greff Dannen said. “Soon, South Dakota courts will transition to electronic filing. To respond to the electronic accessibility to court records, AAA Collections has updated its practices to add further protections for the benefit of its clients and their customers.”
Collections lawsuits still will have a cover sheet that is publicly accessible, she said, but the itemized list of medical information would be available only to AAA and the person being sued for a judgment.
The change, initiated by AAA but not by any other agency filing in the 2nd Circuit, was accepted willingly by Sanford, said Cindy Morrison, the health system’s vice president of marketing.
“It is our understanding that AAA Collections is changing its processes to meet its industry’s best practices; we are comfortable with those changes and view its efforts in that regard as an enhancement,” Morrison said.
In the Sioux Falls region alone, Sanford Health facilities see 4.2 million patient visits a year. About 189,000 of those go to collections, Morrison said, after a patient gets four billing statements and phone calls asking about a payment plan.
The average age of an account balance before it goes into collections is 150 days overdue.
Health care providers, health plans and health care clearing houses are barred from releasing confidential medical information, said Paul Stephens of the Privacy Rights Clearing House.
Collection agencies don’t fall under the privacy provisions of the Health Insurance Portability and Accountability Act, or HIPPA.
“Once you get into the judicial system, it would be up to the law and judge in that jurisdiction to determine what can be done with the information and how it’s handled,” Stephens said.
Privacy interests don’t prevent debt collection. To sue over a debt, collectors generally must specify the nature of the bill. That could include claims for unpaid rent, credit card, landscaping or home improvement bills. As with medical collections, those cases generally include invoices as proof of the debt needing collection.
Some privacy protections are built into current rules, said Greg Sattizahn, state court administrator for the Unified Judicial System.
South Dakota requires parties to civil and small claims cases to mark identifying information such as Social Security numbers and bank account information for confidential filing, for example.
Medical billing records are not assumed to be confidential, however.
Even so, notions that the medical records ought to be shielded from public view are not new in South Dakota. The standardization of the practice of sealing records is, however.
In the 1st Judicial Circuit, which handles 14 counties in southeastern South Dakota, some clerks in some counties had taken it upon themselves to redact certain information, said circuit administrator Kim Allison.
“I’d like to have all my counties doing things the same way, but it doesn’t always happen,” Allison said.
At first, when AAA began moving to file cases confidentially, the agency simply stopped filing the itemized billing sheets, Allison said, but that practice didn’t give the judge or debtor enough information to determine the validity of the debt.
“The party being filed against has a right to know what the claim consists of,” Allison said.
Now, in the 1st and 2nd circuits, the agency identifies which documents need to be sealed at the time of filing the claim.
Medical claims make up a huge portion of civil and small claims caseloads.
In the 2nd Circuit, small-claims cases involving debts of $12,000 or less are scheduled for default hearings in batches. The cases are heard on Wednesdays. About 90 percent of the cases end up paid before the hearing or default when the debtor fails to show up, Thoennes said.
The lion’s share of the Wednesday cases involve medical debt. On May 21, for example, there were 80 small-claims cases that weren’t settled by the hearing date. Of those cases, 76 of those were medical collections, including dental bills.
In the 1st Circuit, Allison estimates that medical collections account for about 75 percent of small-claims cases.
The 2nd Circuit’s other major medical provider, Avera, uses the collections agency Accounts Management Inc. when bills become delinquent.
That agency has not begun to ask for confidential filings but soon might begin to do so, said Avera spokeswoman Lindsey Meyers.
“We have been working with the court, even before the discussion about electronic filing, to come to a better process for filing for collection and payment,” Meyers said.
Electronic filing isn’t an immediate concern for small claims. All civil cases in circuit court will be filed electronically by the end of this year, Sattizahn said, but small claims will go online at the discretion of each circuit’s presiding judge.
“There’s really no target date for small claims,” Sattizahn said.
Online records will be easier to access, but a search by name alone won’t give the public access. Those searching records online need a specific case number, which generally would require a $20 background search on either the plaintiff or defendant.
That’s one reason why Allison doubts that individual debtors should worry about their personal information being widely available.
“Realistically, no one is going to look at small claims except the parties,” Allison said.
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