Class Action Questions Healthcare Revenue Recovery Group’s Debt Collection Practices

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Healthcare Revenue Recovery Group, LLC is the defendant in a proposed class action filed by a plaintiff who claims the company overstepped federal debt collection law in its attempts to collect on a supposed medical debt incurred after a motorcycle accident.

The plaintiff lived in New Jersey at the time of the accident and was covered under her daughter’s auto liability insurance policy provided by Erie Insurance Company, the lawsuit reads. The case notes that Erie Insurance, a Pennsylvania company, does not issue policies in New Jersey.

In January 2018, the defendant mailed the plaintiff a notice regarding her alleged obligation to pay the hospital at which she was treated after her accident, according to the suit. The plaintiff’s alleged debt—$1,453—at the time she received the defendant’s notice was in default, the case claims, noting that although the letter was addressed to the plaintiff, it was sent to her daughter’s residence in Bucks County, Pennsylvania.

The case explains that liability for the cost of treatment in Pennsylvania is limited by a cost containment provision—commonly known as the “Act 6 Reduction”—of the state’s Motor Vehicle Financial Responsibility Law. The lawsuit says the Act 6 Reduction is interpreted to mean that “if Medicare makes any payment for a particular service, then reimbursement for purposes of automobile insurance will be limited to 110% of that amount.”

With regard to the plaintiff’s collection notice, the lawsuit claims the defendant is seeking to collect an amount to which the Act 6 Reduction has not been applied.

“In fact,” the lawsuit reads, “neither [the hospital] nor the defendant even attempted to recalculate the ‘Total Balance’ and/or ‘Amt Owed’ to determine what the provider may ask for, much less is entitled to receive, under the [Motor Vehicle Financial Responsibility Law].”

The amount the hospital that treated the plaintiff is entitled to is significantly less than that sought by the defendant, according to the suit. The defendant’s alleged conduct, as it relates to the Fair Debt Collection Practices Act (FDCPA), constitutes an attempt to collect an amount that is not expressly authorized by the agreement creating the debt or permitted by the law, the complaint argues.