Board Renews Contract with Agency to Collect Millions in Patients' Debts

RIVERSIDE, CA - The Riverside County Board of Supervisors this week renewed a contract with a Delaware-based bill collection agency to provide ongoing services for Riverside University Medical Center in Moreno Valley.

RUMC administrators praised the work of Hospital Billing & Collection Services over the last year, noting that the firm had procured nearly double what the county had anticipated from patients in arrears -- $7.8 million versus $4 million.

The board signed off on the first contract with HBCS last November, directing the agency to focus on both small individual accounts owing $5,000 or less and so-called "legacy" accounts dating back many years, with varying amounts of debt.

The county had written off most of the legacy IOUs, totaling $185 million, according to contract documents.

Altogether, about 76,000 accounts were originally placed under the supervision of HBCS. However, the renewed contract ups the number to 85,000. Potential collections between now and July 31, 2017, could reach $33.6 million, officials said.

Hospital administrators pointed out that the company had not been the subject of one complaint from a debtor.

Under the previous contract, HCBS was entitled to a minimum 8.5 percent in fees on each amount recovered for the county. However, as an incentive to keep the hospital's business, the firm lowered its collection fee to 6 percent.

HBCS estimates its receivables from the county could total $2.1 million over the next 10 months.

Riverside University Medical Center, formerly known as the Riverside County Regional Medical Center, was declared by CEO Zareh Sarrafian last September to be back in the black financially after several years of running cyclical multimillion-dollar deficits.

The hospital underwent a reorganization that began in the fall of 2013 with the dismissal of former CEO Doug Bagley, followed by a $28 million taxpayer-funded rescue plan in which Chicago-based Huron Consulting Inc. was hired to conduct a top-to-bottom review of the hospital's operations to find efficiencies and cost reductions. An interim CEO -- nationally renowned healthcare strategist Lowell W. Johnson -- took the helm.

Johnson's contract concluded toward the end of 2014, when Sarrafian took over.

– By City News Service / Image via Shutterstock