For many reasons, the health insurance system leaves some consumers unable to cover the full cost of care. When that happens, some patients turn to medical funding companies to help them pay their bills. Often, physicians and other providers will refer their patients to medical funders who pay the providers and then collect from these patients. The problem, as journalists Alison Frankel and Jessica Dye learned last year, is that consumers sometimes suffer when dealing with unscrupulous medical funding companies. Dye (@jdye) is a legal correspondent for Reuters in New York. Frankel (@AlisonFrankel) is the editor, On The Case for Thomson Reuters.

As they reported last year, “In the little known world of medical lending, financiers invest in operations to remove pelvic implants from women suing device makers — and reap an inflated share of the payouts when cases settle.”

In their investigations for Reuters, they reported how these investors profit by financing care for desperate patients and how business groups called for a probe of medical funders.

For this tip sheet, we asked Frankel and Dye for advice on how journalists could cover this story.

AHCJ: How would health care journalists learn which medical funding companies are abusing consumers in their states or towns?

Dye and Frankel: Unfortunately, it’s not easy. Medical funding agreements are typically private and multilayered contracts. A plaintiff agrees to permit his or her care provider to sell the medical receivable to a funder. The funder and the care provider reach a deal on the discounted purchase price for the medical bill. And then the funder asserts the entire amount of the bill against the plaintiff’s settlement. Every step of the process takes place outside of court; so, unless a lawyer raises questions–typically, questions come from defense lawyers representing insurance companies–medical liens aren’t exposed to public scrutiny.

But sometimes those agreements are disputed, and if that happens, you can find a record of them in personal-injury legal cases involving auto accidents, medical malpractice, workplace injuries, and defective drugs and devices, among others, meaning any case that involves a plaintiff who needs medical care as a result of his or her alleged injuries. A defendant may, for instance, claim that a medical funding company has exaggerated the true cost of a plaintiff’s care by asserting the full amount of a medical bill. The defendant can ask the court to order the medical lien company to produce underlying agreements between the funder, doctors, plaintiffs’ lawyers and plaintiffs. Those records, in the rare instances when they are made public, can be a rich source of information.

Some medical funding companies work frequently with the same doctors, lawyers and health care centers. So, if you know of a law firm that’s particularly active in personal-injury litigation or you know of a doctor who has worked in the past with medical lenders, you may be able to research court records involving clients of these doctors and lawyers to find out whether medical funding companies are involved. California, Nevada, Florida and Texas are particular hotbeds of medical funding.

AHCJ: Is there a way to search court cases, consumer complaint records, the Consumer Financial Protection Bureau, or other sources that would show which companies are abusing patients?

Dye and Frankel: We are not aware of any agency that formally tracks complaints against medical lien companies, although we were able to find some unhappy patients through Facebook groups devoted to transvaginal mesh litigation, in which medical funding companies have taken a keen interest.

As far as we are aware, there is unfortunately not a systemic way to search court records for medical funding abuses. We happened to come across records involving the funder MedStar because Frankel was already monitoring pelvic mesh litigation dockets.

If you have names of particular funders, you can use services such as Pacer or Westlaw to search state-court records for litigation involving a funder. But that will typically turn up cases in which a physician or plaintiffs’ law firm has a dispute with the funder but not cases in which consumers claim to have been abused. Our research turned up only one class action in which plaintiffs claimed to have been overcharged by a medical funder that asserted liens against their settlements. These cases are quite rare.

AHCJ: Could journalists use Pacer or Westlaw search for legal cases involving medical funding companies as defendants?

Dye and Frankel: Absolutely. If you have the name of a company you’re interested in, you can search Pacer to see if they’ve been sued in federal court, or use a service such as Westlaw or Lexis Nexis to check state courts. As we mentioned above, though, when we looked into court records of actual litigation against funders, the cases were typically business disputes, not consumer cases.

AHCJ: Would you recommend that a health care journalist working on a medical funding story also work w/someone who covers legal issues or ask a health law attorney for advice?

Dye and Frankel: We’re both legal reporters, but even we were surprised by how complex these arrangements can be! So, yes, if you’ve come across one of these agreements, it will probably be helpful to have an expert legal eye look over the contract and help you understand exactly how the lending and lien operation works. In the mesh litigation, for instance, medical lenders relied on complex webs of brokers and medical billing companies that left even investigating lawyers confused.

We suspect that the opacity and complexity of the medical funding business is a big reason the industry’s possible abuses are not widely covered. So if legal reporters or health lawyers can help unravel medical funding arrangements, why not use them?

AHCJ: What are some of the pitfalls to avoid in writing about medical funding?

Dye and Frankel: These issues are definitely complicated. Make sure you reach out to all of the parties involved—doctors, funders, plaintiffs and lawyers—to understand how and why these agreements were struck, and under what circumstances. Also, it’s important to have as many original documents as you can to understand exactly how the agreement works and what it covers. For instance, sometimes defendants allege that medical funders arrange for care unrelated to the alleged injury at issue in the legal case. The more you know about the case and the standard of care, the better you’ll be able to assess whether the agreement ultimately hurt or helped the patient.

You also have to be really careful with language when you’re describing medical lien arrangements. It’s tempting to oversimplify, especially when editors want to make it easy for readers to understand how these funding processes work. But if you don’t explain carefully and precisely how medical funding works, you leave yourself open to funders’ criticism.

AHCJ: Would legitimate medical funding companies be likely to talk about medical funding companies that abuse patients?

Dye and Frankel: Several medical funders who spoke with us assured us their services are legitimate and necessary, particularly for uninsured or underinsured patients who are in desperate need of medical services. It’s one way to make sure patients get care, while making sure the responsible party (or parties) pays, and doesn’t leave the lender in the lurch while the wheels of justice turn slowly. And if you talk to those funders, you’ll find that they often invite more regulation in order to keep bad actors from wrecking the industry’s reputation.

AHCJ: Is there a way to identify which physicians or hospitals use medical funders and does anyone know if physicians or hospitals screen medical funders before contracting with them?

Dye and Frankel: Our experience is primarily on the legal side, not the medical side. So, it’s possible there is a way to find out about those relationships that we’re not attuned to.

Often, you’ll see medical funders contracting with independently owned clinics rather than hospitals. One person even told us she got fairly complicated surgery in a clinic based in a strip mall! So we’d suggest looking at outpatient surgery centers, orthopedics centers and medical spas.

We don’t know how much screening doctors or clinics do before they enter into agreements with the funders. Typically, practitioners benefit because they get paid upfront for bills that it would otherwise take them months or even years to collect, if at all. So, there may be some screening that goes into it, but they may be tempted by the prospect of getting paid in a timely manner.

Court records in the mesh litigation cases indicated that some doctors carefully checked MedStar’s credentials when they were invited to partner with the funder. Others do not seem to have done much due diligence.

AHCJ: What other advice could you offer that would be useful advice for health care journalists pursuing this story?

Dye and Frankel: This is a complicated and difficult issue to report, but it’s an important one for people who may be affected by these agreements. Sadly, it’s often the case that abusive medical-funding practices target primarily the poor and injured—those who have few other options. So, while their cases may seem run-of-the-mill, look closely and you might be able to detect a pattern that points to something happening beneath the surface.