La.’s debt collection methods criticized
At the state Department of Environmental Quality, a $9,754 bill owed by CHRISTUS Health in Shreveport for its X-ray equipment registration is more than 200 days past due.
Northwestern State University in Natchitoches is trying to collect more than $2 million from students who missed tuition installment payments, lost library books or accumulated parking fines.
The state Department of Health and Hospitals is pursuing $20.8 million for medical services that possibly could be the financial responsibility of private insurance companies, Medicare, noncustodial parents and other sources.
Totaled, money due to state government added up to more than $1.5 billion on March 31, which was the last time the Division of Administration crunched the numbers for a public report. Some of the money had been owed for just a few weeks or even days. Other bills had not been paid for months or years. At the same time, the state is struggling to pay its own bills, particularly for providing health care to the poor.
“We need to be doing a much better job at collecting this money,” state Rep. Chris Broadwater said.
Broadwater, R-Hammond, successfully sponsored legislation this year to establish a pilot program to sell, securitize or auction portions of the state’s long-term delinquent accounts, or receivables.
His idea is to allow a bank, collection agency or private citizen to assume the risk of collecting the money in exchange for paying the state a percentage of what is owed.
“I don’t necessarily know the reason it’s not being paid back,” Broadwater said. “I can certainly guess. Maybe in some cases, it’s agencies just not being attentive to the money they’re owed.”
The debts owed range from huge amounts to small sums.
The state Department of Transportation and Development recently billed the city of Walker $1.3 million for work done more than 12 years ago. At the same time, DOTD was months late on paying the Division of Administration $246 in publishing costs.
Other long-term delinquent bills include:
- $509,089 in unpaid student fees at LSU, LSU’s Paul M. Hebert Law Center and the LSU AgCenter.
- $649,895.01 owed by the city of Mansfield for utility work. Payment is more than a year overdue.
- $2.7 million in federally mandated rebates on drugs dispensed to Medicaid patients.
A CHRISTUS Health official said she was unaware the hospital system owed the state money despite DEQ logging the mailing of several past due notices over 234 days.
“Any legitimate debt that is not paid by CHRISTUS Schumpert Medical Center is an oversight and will be taken care of,” said Kristen Gary, spokeswoman for CHRISTUS Health Shreveport-Bossier.
City of Mansfield officials refused comment on why they have not paid the $649,895.01 they were invoiced on June 1, 2011.
Commissioner of Administration Paul Rainwater, the governor’s chief budget advisor, said he is studying the possibility of selling 25 percent of the state’s long-term delinquent bills.
One thing that needs to be determined, Rainwater said, is how much of the money can be collected.
“We want to be realistic about it and what the impact to the budget will really be. You have to make sure those numbers aren’t over-exaggerated,” he said.
Rainwater said Gov. Bobby Jindal pushed two years ago to create a centralized debt collection agency. He said the legislation died.
State Department of Environmental Quality Undersecretary Vince Sagnibene said his agency collects debt by sending notices, seeking court judgments and freezing bank accounts.
“We’re serious about collections, and we’re serious about cost recovery,” Sagnibene said.
Most of the money owed, he said, is for annual maintenance and monitoring fees.
Currently, DEQ has 215 amicable demand letters out, 33 judgments and two bank accounts frozen, Sagnibene said.
For bills that are more than 180 days past due, the Division of Administration lists DEQ with less than $1 million owed the state agency. By comparison, DHH has more than $24 million in old debt.
DHH officials said the bulk of the money owed is for health care services.
DHH Undersecretary Jerry Phillips said the agency provides medical services to between 1.5 million and 1.6 million people in Louisiana each year, whether it is through Medicaid or through rural and public hospitals.
In an effort to lessen the state’s responsibility for covering the costs, Phillips said a contractor reviews files and submits a claim whenever a patient indicates he or she has private insurance.
Often times, the insurance is lapsed or only covers specific medical problems, Phillips said. “We throw the net and we do recover some money,” he said.
The Division of Administration was listed in the March report as having $2,342 more than 180 days past due.
Michael DiResto, the division’s spokesman, said the bulk of bills are for rent, including the state-owned Pentagon apartments assigned to legislators. He said the legislators have since settled their debts.
State Treasurer John Kennedy said he sometimes gets bad checks for projects pursuing borrowing through the State Bond Commission that he chairs.
He said bounced checks result in a call to the Attorney General’s Office, which collects debt for 22 state entities and a number of public colleges.
Kennedy said the state needs a centralized debt collection agency to pursue what are known in accounting terms as receivables.
“No business in the real world could handle its receivables like the state of Louisiana does and stay in business,” he said.
Rainwater said the state does what it can.
“We do a good job, if you look at the numbers overall. You go to any private company, there’s always uncollected debt. You can always do it better,” Rainwater said.