Suit alleges hospital debts were misleading

SPRINGFIELD, Mo. -- Three southwest Missouri women allege in a federal lawsuit that a hospital system misled them by using a fictitious third party to collect overdue payments.

The suit contends the hospital sent debts to Ozark Professional Collections, a division of Cox Medical Centers, and instructed staff not to tell alleged debtors it was part of the Springfield hospital system.

The suit alleges the actions violated the Fair Debt Collection Practices Act, which forbids the use of any business, company or organization name other than the true name of the debt collector.

"If they sent out letters along the lines of Cox Collection Agency, that would be perfectly legal," said Eric Jensen, a Springfield attorney who represents plaintiffs Crista Hogan-Shuler and Tara Lea King of Greene County and Sondra K. Starbuck of Cedar County.

'Disturbing'

"It's one thing not to volunteer, but to hide it is disturbing," he said.

Cox spokeswoman Laurie Cunningham said Tuesday that she would not comment on the lawsuit, filed Monday in U.S. District Court in Springfield. But she added, "One of the discussions I heard today was that this is not an uncommon practice, not only for the health-care industry but other industries as well. I think that probably was a guide to us."

Jensen said the plaintiffs were unaware that Ozark Professional Collections was part of Cox.

"They thought they had been turned over to a collection agency .... All that happened was that a file went down a hall to another employee," he said.

Class action

The attorney, who wants to certify the lawsuit as a class action, speculated that as many as 20,000 individuals may have been affected by the collections.

Jensen hopes to take depositions of hospital staff to show evidence of letters that other debtors received from Ozark Professional Collections mirrored those of his clients. It will be up to U.S. District Judge Ortrie Smith to certify the class.

The lawsuit seeks actual damages and reasonable attorneys' fees and costs for the plaintiffs, besides $500,000 in class-action damages, and additional damages deemed justified by the court. The plaintiffs want a jury trial on all claims.

Cox has argued in court documents that it was exempt from the Fair Debt Collection Practices Act when using its own employees to collect debts, among other reasons.

However, a judge determined that Cox Medical Centers was a debt collector, citing a statute that states the term "includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts."

While he found Cox not liable for some allegations in the Huntsman case, the judge determined the hospital violated the Fair Debt Collection Practices Act by sending two collection letters to the Huntsmans on Ozark Professional Collections letterhead.

Cox purchased the assets of an independent agency, American Professional Collections, in August 1996.

Before then, Cox worked with a variety of independent collection agencies.

The three plaintiffs named in the suit had received at least two letters from Ozark Professional Collections, Jensen said. One allegedly owed a lot of money, one reportedly owed a little, and another "strongly disputes" she owes Cox, the attorney said.