VanderSloot announces proposed reforms to medical billing and collection in Idaho

IDAHO FALLS — Melaleuca CEO Frank VanderSloot wants to change the way medical debt is handled in Idaho, and now he has revealed his plan to make those changes happen.

VanderSloot spoke to a crowd of about 50 Idaho legislators at Melaleuca Global Headquarters on Monday night. The state lawmakers were in Idaho Falls on a day-long tour of the community organized by the Greater Idaho Falls Chamber of Commerce.

During the meeting, VanderSloot outlined his growing concerns with how medical debt is collected in the Gem State and offered a solution by way of proposed legislation, which aims to change how the health care industry bills patients and collects payments.

“We think the public is really going to get behind this,” VanderSloot said. “I can’t imagine very many objections to this, given that every single family is affected by it one way or another.”

The legislation would require health care providers to notify patients within 30 days of a visit of all services rendered and to bill that patient’s insurance plan. Within 60 days of a visit, the health care provider must send patients a consolidated noticed of services rendered with the names and contact information of all parties involved in their care. Finally, the legislation proposes to place limits on the size of attorney fees that can be placed on medical debt when it is in collections.

VanderSloot said one of the biggest challenges faced by patients is the confusing nature of health care billing. He said providers aren’t under any obligation to promptly send bills to patients and that some purposefully wait until later in the year, in the hopes a patient has met their deductible and the provider will only have to deal with the insurance company.

“Some doctors wait several months before they bill the patient … and that can cause patients a lot of trouble because there are a lot of bills that come in,” VanderSloot said.

During an average hospital stay or emergency room visit, VanderSloot said, a patient might use a variety of services, some of which are billed separately. Patients expect to get one main hospital bill, but they may also receive a separate doctor or anesthetist bill, imaging, or pharmacy bills. VanderSloot said the truth is hospitals can’t tell you how much a hospital visit will cost during the visit because they have to deal with third-party contractors.

“So you’re sitting there wondering how much the bill is going to be, and you won’t know — not this month, not next month, and maybe not six months from now,” VanderSloot said.

The ambiguity behind when patients are going to be billed, and by whom, is what leads many people to be suspect when they receive multiple bills in the mail.

“Some of these bills may be from doctors or companies that you’ve never heard of before … the patient might think, ‘This isn’t a real bill. This is a scam,’” VanderSloot said. “And I might be tempted to throw a bill like that away, and that is where the attorneys have a heyday. ”

Medical debt collection attorneys were a big part of VanderSloot’s presentation to legislators. Over the last six months, the billionaire CEO has spearheaded efforts to curb what he considers unethical debt collection practices.

His efforts started after an anonymous Melaleuca employee found herself facing over $5,000 in attorney’s fees on a medical debt that was originally $294.

Following that case, ran a four-part series into Medical Recovery Services, the company that was pursuing the debt against the employee. MRS is partially owned by Idaho Falls attorney Bryan Smith and employs Rep. Bryan Zollinger, R-Idaho Falls, who litigates on behalf of MRS. During our investigation, found the company files several thousand lawsuits each year seeking to collect on medical debt in Idaho. In hundreds of these cases, they attach attorney fees, which double or triple the amount of the original debt.

Shortly after the series ran, VanderSloot announced a $500,000 fund to fight debtors back against large fees assigned by debt collection attorneys. Last week, VanderSloot doubled that amount of money and announced they have taken on 140 cases on behalf of clients. So far, 35 of the cases have renegotiated to help patients.

During Monday’s speech, VanderSloot didn’t specifically mention MRS, Smith, or Zollinger, who was in attendance as a local legislator. But he did say that after his team had spoken with hundreds of people impacted by a variety of unfair debt collection practices, that it was clear that something needs to change in Idaho.

“Now patients don’t just have to deal with the debt — they have attorney fees stacked on top,” VanderSloot said. “We don’t think that increases the quality of our health care, and we think it hurts Idahoans dramatically.”

In an email statement to, MRS spokesman Mark Harris said Bryan Smith would be willing to help work on these issues.

“In the past, we have proposed common-sense legislative changes to make all debt collection cases fairer for people who unfortunately find themselves in a collection lawsuit. Unfortunately, our efforts with the legislature have not been successful,” MRS spokesman Mark Harris said. “We would gladly work with Frank VanderSloot to make the entire system fairer for everyone, not just those with medical bills.

Harris said MRS has no role in physician billing procedures and has no comment on that part of the proposed legislation. But he did weigh in on VanderSloot’s efforts to curb attorney fees.

“The other part of the proposed legislation deals with the issue of reasonable attorney fees and is already reflected in current Idaho law,” Harris said. “No collection agency can simply ‘charge’ attorney fees to the person owing the debt. Under existing law, the court is required to award only a reasonable attorney fee. We can think of no fairer way than to have a judge review every single award of attorney fees for reasonableness as is the case right now.”

At the end of the meeting, VanderSloot urged lawmakers to get on board with the process, and many in the room were supportive.

“I think this kind of concept is going to have general widespread support,” Sen. Dave Lent, R-Idaho Falls, told “So many people in our communities and throughout the nation really struggle with the complexity of medical billing, and this is a step in the right direction.”

Rep. Doug Ricks, R-Rexburg, said he believes the Legislature will be receptive to VanderSloot’s ideas, but there will need to be a discussion about the language in the bill.

“This is something we definitely need to look at, and we appreciate Mr. VanderSloot looking into this to provide some help to families who need it,” Ricks said.

VanderSloot said over the next few months, his team will be drafting the language of the bill, in preparation for its presentation in the Legislature in January. He is also encouraging the public to get involved and talk to their legislators about changes that need to be made to the medical billing process.

“We’re hoping our state senators and state representatives will to buckle down and do the right thing here,” VanderSloot said. “Our job here will be to provide transparency and moral support and backing for those that take any criticism from those who may be on the other side of this argument.”