Melaleuca CEO Frank VanderSloot announced Thursday that he is donating an additional $500,000 to the legal defense fund he and his wife created to help Idahoans fight medical debt collectors.
The second donation brings the total of the Idaho Medical Debt legal defense fund to $1 million. The fund has paid for legal assistance to dozens of people being sued by Medical Recovery Services and a handful of other debt collection agencies across the state.
To date, 483 people have asked VanderSloot’s representatives for help with the collection agencies. The team has helped settle 35 debt cases in favor of the defendant, while another 105 are going through the court system, VanderSloot said Thursday.
“When you hear the same story from different people with firsthand experience, one after another after another, telling you the same thing, then you start saying these stories are very likely to be true,” VanderSloot said.
Frank and Belinda VanderSloot created the Idaho Medical Debt legal fund in April after a series of articles about the issue were published by East Idaho News, which VanderSloot founded. One case involved a Melaleuca employee who was billed for nearly $6,000 in attorney fees by Medical Recovery Services over a $294 bill.
Thousands of debt collection cases are filed in Idaho every year by Medical Recovery Services and the law firm Smith Driscoll and Associates, which handles the cases for MRS. State Rep. Bryan Zollinger, R-Idaho Falls, is an attorney for the law firm and is listed as the registered agent for Medical Recovery Services in records from the Idaho Secretary of State’s Office.
“Can you imagine the unbelievable weight and cost that puts on our court system? In that sense, the taxpayers are subsidizing what I would call a scam,” VanderSloot said.
A news release from VanderSloot’s office outlines a list of questionable tactics that the defense fund had heard of MRS using in previous cases, ranging from telling defendants not show up in court in order for MRS to earn default judgments against the defendants to being unable to provide records of debt or trying to collect on settled cases.
In a statement to the Post Register, Medical Recovery Services spokesman Mark Harris called the allegations about the company’s tactics and the success of the legal defense fund “laughable nonsense.”
“Frank’s personal vendetta is both irrational and false. Medical Recovery Services has always operated at the highest level of ethical behavior. We’ve been open and transparent about how we operate,” Harris wrote.
VanderSloot also said he has been working to draft a bill for the state Legislature that would regulate some of the reportedly unscrupulous practices used by debt collection agencies and that several lawsuits were being prepared against Medical Recovery Services by people who had previously been sued.
“To date, this has all been defensive. But within the next couple of weeks, several of those defendants are going to become plaintiffs,” VanderSloot said.
While he was vague about the specifics of the bill being drafted, he said the legislators he had already consulted about the bill had “an enthusiastic response” to it and believed there would be a similar reaction once the details became public. He emphasized that the action against medical debt collectors was not an attack on doctors or hospitals, which he said he would consult with while working on the potential legislation.