January 11, 2008 - Virtually everyone knows that they have a credit score and there are a lot of credit scoring models; the most popular being Fair Isaac's FICO score. Credit scores are used by banks to determine the interest rates you pay on the money you borrow but they are also used for a lot of things other than credit. These include being used by employers to determine if they should offer you a job and by insurers to set the rates you pay on auto and home insurance policies. Now there is a plan afoot by Fair Isaac to introduce a new score called medFICO. And because this score only deals with medical bills, there is some real fear that medFICO could wind up being a real killer!

The medFICO score is an attempt to analyze how people pay their medical bills. The scoring system used is being developed as a team effort between Healthcare Analytics, Tennant Healthcare and Fair Isaac. It has also received funding from North Bridge Venture Partners.

The medFICO score will work very similarly to a FICO score. The real difference is that the only bills that will be considered by medFICO will be medical in nature. So if you pay your medical bills on time, you'll have a good score. If you pay your medical bills late, or are unable to pay them, then your medFICO score will be bad.

The development of the medFICO score raises a number of legal and ethical questions. Perhaps the most important of these is, "Will hospitals pull a medFICO score report prior to agreeing to treat patients?". If the answer to this is yes, it stands to reason that those with good scores will get better treatment. It also begs the question of whether people will be turned away from medical care is their medFICO score is poor?

According to Stephen Farber, CEO of Healthcare Analytics, the scenario mentioned above will not occur. He has said that medFICO scores will only be pulled by hospitals after treatment has been rendered. "We only come into play once the patient has been treated and discharged, and the bill already exists. We just help figure out what sort of relief a hospital should grant the patient."

While Mr. Farber's assurances sound nice, the reality is that unless it becomes illegal to do so, one can almost be assured that some hospitals will begin to check this score prior to treating patients. Once that happens, those with low scores should expect it to take longer for them to receive treatment, and that doctors and staff may fail to recommend any treatment other than the bare minimum.

Although hospitals routinely check the credit of patients using traditional FICO scores, there has apparently been some concern that FICO scores don't reflect actual consumer payment patterns with medical bills. The reason for this is that most credit is taken out voluntarily. But medical bills are often forced upon consumers. So even someone with the best credit may be slow-paying when it comes to medical treatment.

The medFICO score is closer to being a reality that you may like. It is expected to debut in some hospital by this coming summer.

ACCESS is urging both state and federal regulators to look seriously at limiting the use of medFICO scores by the medical industry. We believe that unless some regulation is put in place, medFICO will eventually lead to significant degradation in healthcare for many people.

by Jim Malmberg

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