The Cayman Islands Health Services Authority is set to begin a pilot project within the next two weeks aimed at collecting some $1 million in unpaid hospital bills.

The authority has retained local law firm HSM Chambers to chase down the debts – which constitute just a small percentage of the money health officials say the public hospital system is owed – in order to judge the success of a more aggressive approach to collecting long-standing bills.

The law firm’s ability to take debtors to court to collect those sums is a method the Health Services Authority has not used in the past, but Chief Executive Lizzette Yearwood told the Cayman Compass Wednesday that option is now on the table.

“We will change the culture through this process,” Ms. Yearwood said. “We are trying to help our customers understand that we are serious about collecting for services. However, there are government programs to assist eligible persons who are unable to pay.”

HSM Managing Partner Huw Moses said the firm would be commencing collection operations through the normal process, contacting debtors first via phone, emails or letters and negotiating with them about payment. Mr. Moses said taking individuals to court in debt collection cases is always used as a final option and that the preferred alternative is to work out a payment plan.

“If you have a lot of people paying something towards their debt, it’s better than having no people paying the … debt,” Mr. Moses said. “The HSA has a real problem; people aren’t paying their debts. But [collection] has to be done with compassion …. that’s the key point.”

Cayman Islands Auditor General Sue Winspear recently reported that $94.5 million in so-called “bad debts,” essentially overdue amounts, have been accumulated by the public hospital system. Those considered bad debts are more than a year old and, because of their age, are less likely to be collected.

Ms. Yearwood said hospital officials wanted to attempt the trial run, focusing on just the $1 million in unpaid debts, to see how effective it would be in recovering funds owed. If the effort is a success, debt collection attempts would be expanded, she said.

It is not the first time the health authority has attempted to collect outstanding bills, but it is the first time a local law firm has been used in that process. HSA Chief Financial Officer Heather Boothe told the Legislative Assembly’s Public Accounts Committee in October that the authority tried to collect about $4 million in unpaid bills, achieving roughly a 3 percent success rate.

During that hearing, Public Accounts Committee members pressed Ms. Boothe for answers on why the health authority was continuing to attempt to collect debts that were more than a year old, if it believed those were not collectable,

Committee Chairman Ezzard Miller asked whether HSA finance staff made recommendations to the board to write off certain debt amounts. Ms. Boothe replied that there had been recommendations made, but they were not always accepted. “You didn’t collect it for a whole year … why is it not written off?” Mr. Miller asked. “Why aren’t you making a recommendation to the board to write it off instead of letting it accumulate to this level?”

“The board might be reluctant to write off the debt; they prefer to try to see if there’s anything collectable,” Ms. Boothe said.

“We want to reassure the board that we have done absolutely everything to collect it before it’s written off,” Ms. Yearwood told the committee.

The vast majority of the health authority’s uncollected debts come from what the agency terms “self-pay” patients. This covers a wide range of individuals, including people who do not qualify for government assistance but who have no health insurance, or inadequate health insurance coverage. Examples of this type of patient can include visitors to the islands, work permit holders who do not have insurance or whose insurance coverage limits have been exceeded, elective surgeries and baby deliveries.

The HSA accumulates about $15 million a year in unpaid debts from self-pay patients, officials confirmed Wednesday.

Ongoing issue

HSA Board Chairman Jonathan Tibbetts told the accounts committee last year that the bad debt problem is a long-standing one and noted there is something of an impromptu “statute of limitations” for uncollected debts between the HSA board and Cabinet.

“As far as anything over six years old, it’s already known that it’s uncollectable,” Mr. Tibbetts said. “Some people [owing debts] are deceased … it’s going to be next to impossible to collect.”

Ms. Yearwood said the hospital system had been “more consistent” in enforcing payments since 2014, particularly with patients who underwent elective surgeries. However, the total allowance for unpaid receivables dates back to more than a decade ago, and some of the bad debts date from the 2004-2005 era.

Government officials have acknowledged the bad debt accumulation, at least in the public hospital service, is partly due to a decision made in 2010 not to take debtors to court.

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  1. Roger , friends knowing friends, and this contract would cost the Taxpayers 3 millions $ to collect 1 million . But it would be interesting to know how the firm was selected and what is in the contract .