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MedHealth not duly licensed to collect patients' debts on behalf of GMH


Who really owns MedHealth? GMH unaware of the contractor's licensing status



By Mar-Vic Cagurangan

MedHealth Solutions LLC, the company commissioned by Guam Memorial Hospital to collect outstanding debts owed by patients, among other tasks, is conducting business with the government with an expired consulting service license.

While the contract indicates that MedHealth will be compensated “30 percent of any dollar collected for any unbilled, uncollected or denied claims that GMH refers to the contractor for which the contractor obtains payment on behalf of GMH,” the hospital’s legal counsel, Jeremiah Luther, acknowledged that the consulting firm is not legally authorized to collect debts.


“They should not be representing themselves as a collection agent. They are a consulting firm for revenue cycle management,” Luther said. “If they are indeed performing collections, I need to know.”


Attorney General Leevin Camacho, who is among the signatories to the contract, declined to comment on the contract.

“I believe GMH has its own legal counsel. You may direct your question to them,” Carlina Charfauros, public information officer for OAG, said in an email. “We did review the contract as to form and legality. However, this is a contract administration question, not a contract legality question. We defer this to GMH because we have no knowledge of what happened after we reviewed the contract.”


Luther, a former prosecutor, said he was not privy to the hospital’s contract negotiation with MedHealth. He came on board in June this year. The contract was signed on May 27, 2021.


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According to the Department of Revenue and Taxation’s business license division, MedHealth’s license expired in August.


The company’s ownership has also been a subject of speculation. An affidavit of ownership disclosure signed on July 21, 2020 listed Rene Ramos, Paul Pineda and Glen Hermes as MedHealth’s owners.


The expired business license listed RDR Holdings LLC of California, Pin High Solutions LLC of Virginia, and GH Innovations LLC of Texas, as the company’s owners.


According to the business license division, the three holding companies are not registered with RevTax.


Hermes is listed as an agent for GH Innovations, but it is not clear if Ramos and Pineda are connected to RDR Holdings and Pin High Solutions. Our repeated requests for an interview were not answered.


Besides the 30 percent commission based on the contract, GMH has agreed to pay the contractor “12 percent for amounts collected above the hospital’s projected monthly collections of $7.2 million.”


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A local finance expert raised a red flag on the hospital’s arrangements with MedHealth.

“To operate a collection agency in Guam, an application must first be submitted to RevTax for a business license indicating that the type of business is a collection agency,” said Harvey Egna, former senior vice president for national recovery and collections and asset liquidation at Wells Fargo.


Egna, a former senatorial candidate, also served as vice president for card services at Baltimore Bancorp, and vice president for card services at Bank of Hawaii.

“The business license office at RevTax then refers that application to the ISBRE Branch (Insurance, Banking & Real Estate) for additional vetting and satisfaction of additional requirements (such as a performance bond, review of financial statements, etc.) before signing off on an approved business license to operate a collection agency,” Egna said.


In the case of MedHealth, Egna said no such application was made, and no such license or certificate exists for MedHealth to operate a collection agency or debt collection company.


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“If MedHealth is in fact collecting funds on behalf of GMH, they are operating as an unlicensed collection agency. I have further concerns: debt collection is highly regulated by the federal government," he added.


Egna cited the federal Fair Debt Collection Practices Act, which “specifically limits the actions of debt collectors who are attempting to collect past due debts including medical debts.”


“However, if MedHealth is collecting debt, and in fact operating as an unlicensed collection agency, it may not be acting in compliance with the FDCPA. This potentially exposes GovGuam to the risk of federal consumer complaints. The creditor – in this case, GMH— is ultimately responsible for the actions of its agency,” he added.

Harvey Egna

Egna also raised a data security concern. “If patient data is being shared by GMH with MedHealth for the purpose of debt collections, how and where is that data secured? Patient data is very sensitive and may contain SS numbers, addresses, and employment information. Is this data stored on a personal laptop, in a pile of folders? How is it secured? Who has access to the patient's data? How is it transferred between GMH and MedHealth? The Agreement between MedHealth and GMH wasn't clear on data security and management.”

A source with RevTax confirmed that “any company engaged in revenue or debt collection must have a license for such a purpose. You can't be a debt collector with a consulting license."


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In an earlier statement, Cindy Hanson, communications director for GMH, said, “The scope of services was essentially to assist/enhance GMH’s processes in capturing and collection of patient revenue in accordance with the Healthcare Financial Management Association.”


Luther said MedHealth “has never collected any debt— it’s not what they are contracted to do. They did not negotiate payments. They did not hold funds on their own. They are not a collection agency.”


The contract indicates that MedHealth will assist GMH in improving its “revenue cycle management” or RCM processes.

According to the TechTarget website, RCM “is the financial process, utilizing medical billing software, that healthcare facilities use to track patient care episodes from registration and appointment scheduling to the final payment of a balance. RCM unifies the business and clinical sides of healthcare by coupling administrative data, such as a patient's name, insurance provider and other personal information, with the treatment a patient receives and their healthcare data.”


Luther said MedHealth is “working behind the scene to train GMH to do the collection and billing. It’s not permanent. They are doing the training until GMH is sophisticated enough to stand on its own.”

When asked about the 30 percent payment provision in the contract, Luther said the GMH financial department has not referred any unbilled accounts to MedHealth.


“I can’t tell you what the thought process was for this section,” he said, noting that the contract may be open to subjective interpretation.


“It’s not illegal to put a provision in the contract where in the future a license is required,” Luther said.


But without an appropriate license, Luther said, “MedHealth would have to be prevented from executing that part of the contract.”


If they are indeed performing collection without a proper license, Luther said, “then it looks like they are violating the law.”


Senatorial candidate Ken Leon Gurrero has asked the FBI to look into GMH's contract with MedHealth. "I requested a probe into the use of Medicare, Medicaid and the American Rescue Plan funds," he said.




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