Memorial joins health-care providers paying refunds via debit cards

July 21--The use of debit cards instead of checks or cash to issue refunds keeps growing among American retail businesses, and that trend has reached the health-care sector, where it is being felt by customers of Springfield's two large hospitals.

HSHS St. John's Hospital has refunded overpayments to patients and insurance policy holders through PNC debit cards since November 2015, spokeswoman Erica Johnson said.

Customers of Memorial Medical Center and Memorial ExpressCares began receiving PNC debit cards in May for the 200 to 300 refunds Memorial Health System issues each month, according to Korey Davis, Memorial Health System's director of corporate finance and treasury.

"We've decided that this is the process we're going to use going forward," according to Davis, who said the new process provides better service to customers.

The debit cards can be used the same as cash when patients use them to buy groceries and pay bills, he said.

Not everyone is happy with the change, however.

Karen Kabat Kendall, 68, a retired registered nurse, said she received two plain, unmarked envelopes mailed to her Chatham home and thought at first that one might contain a new debit card from her bank or both envelopes might be junk mail.

She was surprised on July 6 to find two PNC debit cards from the bank on behalf of Memorial Health System.

Accompanying letters said the cards would give her access to refunds for bills she later learned she overpaid for her two step-grandsons, who live with her and her husband and are covered by her health insurance as a state government retiree.

She said the letters were confusing and made it sound like she would face multiple bank fees for getting access to her own money.

"A little explanation goes a long way and would have been helpful," Kabat Kendall said. "It may be more convenient for them, but it's not convenient for the average person."

Davis acknowledged that the letter accompanying the cards can be improved, and some of the fees listed on the letter are inaccurate. Fixes and improvements are in the works, he said.

But paper checks won't be issued anymore, Davis said. If patients have issues with the debit cards, he said, "We will do our best to resolve those issues."

Davis said Memorial Health System eventually will expand the use of PNC debit cards to patients of Memorial Physician Services.

The number of patients receiving refunds each month represents less than 1 percent of Memorial Medical Center's inpatient and outpatient volume, health system spokesman Michael Leathers said.

The organization switched to debit cards because working with PNC, rather than using the internal process of issuing paper checks, gets refunds into patients' hands at least one week and sometimes several weeks sooner, Davis said.

Memorial receives "no compensation or kickbacks" from PNC, he said.

The use of debit cards for refunds has been prevalent in U.S. retail businesses for at least 10 years, Davis said. Health-care providers began issuing debit cards the past few years, he said.

Memorial has received "less than 10" complaints from patients since the new system began, he said.

When Kabat Kendall called PNC's toll-free number, she said she was told by an electronic voice that each of the two debit cards carried a balance of $713.73.

She wasn't able to retrieve her PIN for the cards the first time she called. She was able to receive a PIN on the second try. That's when she reached a live person and was told that callers face a $2.50 fee -- withdrawn from the card balance -- each time they speak with a PNC call-center attendant. She was told the fee would be waived this time.

PNC wasn't able to tell Kabat Kendall which patient accounts were involved in the refunds. She had to call Memorial's billing department to retrieve those details.

The PNC letters, she said, made it appear that the card balances would be assessed a $2.50 fee for each ATM withdrawal, as well as a monthly card maintenance fee of $3. And the letters said there would be a $3 monthly fee if the cards were inactive for three months or more.

Though small, the fees bothered Kabat Kendall. "It's the principle of the thing," she said.

The call-center attendant told her some of the information on the letters was wrong. And the attendant said there is no fee for ATM withdrawals if a PNC ATM is used; that detail actually was at the bottom of the letter and identified with an asterisk.

The attendant also told Kabat Kendall that there is no monthly card maintenance fee. There's an inactivity fee only if a card is activated but unused for 12 months. And there's a $5 fee for cash advances on the cards from a bank teller, with a per-day limit of $5,000.

The cards each have a daily withdrawal limit of $500, so Kabat Kendall is faced with multiple visits to an ATM to get all of her money in cash.

For years, Kabat Kendall said has paid the full amount billed to her by health-care providers, even if the bill hadn't been fully proceed by her health insurance. She said she did this even when she worked as a registered nurse for the Illinois Department of Public Health.

Once she received a refund check, she said she would deposit it directly into her bank account, which happens to be at PNC.

"It's your money, and you're not being encouraged to be responsible and save it for an emergency," Kabat Kendall said. "I don't think it's user-friendly. I worry about an older person who doesn't have a debit card, doesn't know what to do with it and throws it in the trash."

Hospital Sisters Health System, the not-for-profit health system that operates HSHS St. John's Hospital in Springfield, hasn't received any complaints about getting refunds on debit cards, Johnson said.

A few patients have requested checks instead of debit cards, she said.

The system's business department, which can be reached at (888) 477-4221, issued checks to those patients and will do the same for other patients who request, she said.

Springfield Clinic and SIU Medicine, the physician group at Southern Illinois University School of Medicine, issue refunds through checks and not debit cards, spokeswomen for those organizations said.

Kabat Kendall, who worked as an intensive-care nurse for Memorial Medical Center in the late 1980s and early 1990s, said she has been happy with the health care provided by Memorial Health System and its affiliates but doesn't have the same feeling about the refunds via debit cards.

According to Kabat Kendall, Davis apologized for any inconvenience she experienced when he called her after The State Journal-Register alerted Memorial to her situation.

Kabat Kendall said she was impressed with Davis' politeness and knowledge. She said she appreciated his time and attention but told the SJ-R she still prefers getting her refunds on paper checks.

She said she would rather wait another week or two for her refund than deal with more frustration.

Contact Dean Olsen: [email protected], 788-1543, twitter.com/DeanOlsenSJR.

Patients of Memorial Medical Center & ExpressCare receiving refunds on debit cards by Dean Olsen on Scribd

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