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Medical debt collector protection

Even in these politically contentious times, people with different political outlooks can come together to accomplish a shared goal. I had that experience with Frank VanderSloot, the founder and CEO of the Melaleuca company. Despite differences on some issues over the years, we viewed the issue of abusive collection practices against medical debtors through the exact same lens.

When Mr. VanderSloot learned of abusive medical debt collection practices being used by an Idaho Falls law firm against one of his employees, he stepped forward to help. He learned other medical debtors were being mistreated by the same law firm and set up a fund to assist them in defending collection suits. He then used his considerable influence to get the Idaho Patient Act (IPA) passed in 2020 to stop abusive medical debt collection practices.

I came at the issue from a different standpoint. During my service on the Idaho Supreme Court, we dealt with a number of medical debt collection cases brought by the law firm, Smith, Driscoll & Assoc., on behalf of a collection agency it operated, Medical Recovery Services. They charged exorbitant attorney fees against debtors who often were unable to afford an attorney. The cases were shocking. That prompted me to testify in favor of the IPA after I retired from the Court.

The Smith in the law firm is Bryan Smith, an ultra-right politician, who serves as Vice Chair of the Idaho Freedom Foundation and who has twice unsuccessfully challenged Congressman Mike Simpson. Smith challenged Medicaid expansion in the Idaho Supreme Court in 2019, but suffered a decisive loss. Medicaid expansion was obviously bad for his collection business—the more bills Medicaid paid, the fewer collection targets his firm had.

Last year, Mr. Smith challenged the constitutionality of the IPA in what Mr. VanderSloot characterized as a collusive lawsuit. The case certainly raises some eyebrows. A former employee of Smith ran up a $777 medical debt and refused to pay. Smith brought suit in Idaho Falls to collect. A Boise lawyer defended on the ground that Smith did not comply with the collection requirements of the IPA. Smith then claimed the IPA was unconstitutional, filing a voluminous brief to overturn the law. The Boise lawyer did not seem to break much of a sweat defending the IPA and the judge found a couple of what he thought were constitutional problems in the law.

When Former Attorney General Lawrence Wasden learned of the ruling, he determined that the IPA was constitutional and sought to intervene in the case. Wasden advised the court that Smith had failed to comply with a law requiring the AG to be notified if a constitutional challenge was made against a state statute. Smith opposed the intervention, as did the Boise lawyer representing the debtor. His opposition to the help was quite puzzling. When the AG wants to use the resources of the state to help your client, almost any lawyer would welcome the help with open arms

Wanting to make sure the judge was made aware of legal grounds to support the constitutionality of the IPA, Mr. VanderSloot spent a good deal of money to obtain a

first-rate legal analysis of the law and furnished it to the AG’s office in December. I’ve read it and found it to be a solid piece of legal work. It should help to uphold the IPA.

Attorney General Labrador has inherited the case. There was fear that he might allow Smith, a political friend, to win the case. But his office has filed a fairly good brief supporting the request to intervene. That is an encouraging sign. Labrador is scheduled to file a brief in the case by March 31. If that brief gives strong support for the constitutionality of the IPA, it will reflect well upon him. He will have stood up against abusive medical debt collection practices by Smith and others of his ilk.


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