Frank Vandersloot - medical debt recovery services

Frank VanderSloot shows off a stack of medical bills while addressing state legislators about a proposed bill to reform medical debt collections at Melaleuca headquarters in Idaho Falls on Monday.

Melaleuca CEO Frank VanderSloot has provided Idaho lawmakers with an admirable example.

Shocked by the treatment of one of his employees by Medical Recovery Services and its affiliated law firm, Smith Driscoll and Associates, VanderSloot set aside $500,000 to provide legal representation. That pledge provided aid to more than 100 local families facing medical debt collection. VanderSloot recently doubled his pledge and announced that he would be pushing a bill in January that would reform the exploitative practices that are omnipresent in debt collection.

It would require medical providers to give patients a consolidated statement outlining who they’ll receive bills from, and it would require doctors to provide those bills promptly. This will allow patients to track their bills so they don’t face a string of unexpected charges for a single hospital stay.

VanderSloot’s bill would also prevent the attachment of usurious levels of attorney fees in medical debt collection cases, a common practice that often starts with the fine print on a hospital intake form, the kind of fine print that a woman in labor or a person with chest pains is unlikely to read carefully, for obvious reasons.

Lawmakers should consider capping attorney fees for this kind of “legal work.” Most Idahoans would love to be paid $50 an hour. Perhaps that would be a fair cap for the Legislature to set for debt collection legal work. If debt collection is less lucratively compensated, there will be fewer incentives to enter the abusive trade. And presenting a string of cases for default judgment isn’t exactly a high-skill task, so it’s a fair level of compensation.

VanderSloot’s crusade to reform this “racket,” as he rightfully called it, is welcome. But it shouldn’t be necessary, and lawmakers should take additional action beyond what VanderSloot has proposed.

Why is it that VanderSloot’s pledge of funding would require a judge to suddenly block out months of trial dates, as Judge Jason Walker did earlier this month? Shouldn’t a significant portion of the thousands of medical debt collection cases filed each year be regularly going to trial already? But they aren’t.

It is a fundamental injustice that wealth plays such a role in the legal system. No amount of money changes the facts in a case. How is it right that a million dollars can so dramatically change the legal process?

The answer is that the state has neglected its duties.

This is not an unsolvable problem. In the criminal arena, the state is required by the U.S. Constitution to provide a system of public defense for those unable to afford a lawyer. And public defenders, despite being chronically overworked and underpaid, achieve fairly similar outcomes to privately retained criminal defense attorneys, according to national statistics and a number of studies.

But the state does nothing to provide a lawyer to those who can’t afford one in civil cases.

Idaho Legal Aid Services, a nonprofit which can provide some representation to the low-income Idahoans, receives no state funding. That’s a scarlet letter Idaho shares with only a handful of other states, and it leaves Legal Aid dependent on grants which are narrowly tailored to a few specific purposes, especially providing representation to those suffering domestic abuse in obtaining no-contact orders and litigating custody disputes.

But there is precious little grant funding to fight consumer abuses, which are rampant in the region. Many prospective homebuyers who paid Hathaway Homes Group tens of thousands without getting anything in return, only to have their funds gambled away at a Las Vegas craps table, have no lawyer to represent them in the company’s bankruptcy, where they have to compete against Hathaway’s deep-pocketed, lawyered-up creditors for a share of the remaining assets. That’s unjust.

And it is equally unjust that so many in medical debt have been charged attorney fees that are many times the underlying debt, set in stone by a default judgment because they can’t afford legal representation to negotiate a fair figure and payment plan.

There have been efforts in recent years to provide state funding to Legal Aid, some of which passed the House by wide, bipartisan margins. These bills have generally died without a hearing in Sen. Patti Anne Lodge’s Judiciary Committee. That’s a dereliction of duty.

VanderSloot has made the commendable decision to act as a benefactor in many local medical debt cases. But low-income Idahoans subject to abuses by debt collectors shouldn’t have to rely on a benefactor.

Lawmakers should pass VanderSloot’s bill.

And then they should shoulder their rightful responsibility and provide funding for Legal Aid.

Look at the change that has been made by one man’s pledge to take on this responsibility in this small corner of the state; see the considerable benefit to the general public that has already been realized through that decision; and imagine how much the citizens of this state would benefit if lawmakers followed VanderSloot’s lead.

The Post Register’s editorial board consists of Publisher Travis Quast, Managing Editor Monte LaOrange and editorial writer Bryan Clark. Clark can be reached at 208-542-6751.