Medford grad's nonprofit works to erase medical debt
By NICK MORGAN
Aug. 04, 2018
MEDFORD, Ore. (AP) — A nonprofit founded by a Medford High School graduate that's bought then abolished millions of dollars' worth of unpaid medical debt is now looking to help Rogue Valley residents.
At any given moment, more than $1 million worth of southern Oregonians' medical debt is placed on the market for debt buyers, who purchase it in portfolios and sell the debt to collection agencies, according to Jerry Ashton, founder and executive vice president of the New York-based nonprofit RIP Medical Debt.
In four years the nonprofit has facilitated $120 million worth of medical debt forgiveness involving more than 60,000 people across the country, according to Ashton, a 1955 Medford High School graduate who lives in New York after spending the bulk of his career in finance and collections.
RIP Medical Debt purchases the debt for pennies on the dollar — same as any collections agency — but instead of sending a team of persistent collectors, RIP Medical Debt merely sends the debtor a letter telling the individual their debt has been forgiven thanks to a sponsor.
The caveat: The debt the nonprofit buys is purchased in bulk from third parties, meaning it can help only in cases in which the debt has been sold to those parties. Only about a third of hospitals around the country sell medical debt to collection agencies, according to Ashton, though the organization has plans to work closer with hospitals.
Ashton is working with his brother, Tom Ashton of Phoenix, on a plan in southern Oregon and other portions of the state to purchase medical debt directly from hospitals at similar rates.
Inspiration for the nonprofit came in September 2011, after Ashton, then semi-retired in the collections industry, found himself an unlikely participant in New York's Occupy Wall Street movement. He spent "several days a week there, because it was so interesting," Ashton recalls, jumping into workgroups such as alternative banking, media outreach and student debt.
"And they noticed they had a bill collector in their midst," Ashton said.
By 2012, Occupy organizers sought his input in a plan to use Occupy donations to pay $50,000 and abolish roughly $1 million in medical debt . Ashton and RIP Medical Debt cofounder Craig Antico, who'd worked with Ashton for years in the collection industry, reverse-engineered collections software to send out forgiveness letters rather than collection letters.
Ultimately they used Occupy-related donations of $700,000 to abolish $30 million in debt.
The movement ultimately shifted priorities to other projects, but Ashton said he was moved by the letters he received from grateful patients. He started the nonprofit July 25, 2014, but it didn't receive Occupy donations because "we weren't them," Ashton said. It raised about $8,000 its first year and just a few thousand more in 2015.
"We were struggling as a charity," Ashton said. "And then along came John Oliver."
A windfall came in the middle of 2016, after HBO's "Last Week Tonight with John Oliver" used Ashton's nonprofit to purchase roughly $15 million worth of medical debt.
The British comedian had planned to purchase the medical debt directly, using a collection agency he'd created in Mississippi called Central Asset Recovery Professionals, Inc., or "CARP" for the bottom-feeding fish, according to Ashton and the video. The show wanted to purchase a portfolio of $14.9 million in medical debt for $60,000, but HBO's lawyers said patient privacy laws prevented the network from buying it.
"They'd already paid for it, but they hadn't taken possession," Ashton said. "Attorneys for HBO started calling all over New York finding the attorneys who understood HIPAA laws and what they were trying to do in this comedy skit."
By chance, they consulted a health care lawyer at the law firm of Nixon Peabody, who happened to have on her desk a copy of the book Ashton co-authored, "The Patient, The Doctor and The Bill Collector: A Medical Debt Survival Guide."
"In Chapter 10, we talked about the fact that we'd started a charity, we didn't know where it was going to go, we knew what it could do, and we were hoping for the best," Ashton said.
Ashton said he had his first meeting with HBO two weeks before Oliver's show was set to air.
"If they didn't get this handled, they would've had to blow the show," Ashton said. "That's how close it was for them."
Ashton remembers ordering sushi as producers and HBO's legal team went through the medical debt portfolio, which contains social security numbers, addresses and other pieces of identification.
"We as a 501(c)(3) could take possession of the portfolio and forgive it with no tax consequences to the patient," Ashton said. "A business could not do that."
"They don't have to own the portfolio, they don't have to buy it, they just have to be the godsend."
Oliver's segment, which aired June 5, 2016, to much fanfare, claimed to "out-Oprah Oprah," by erasing nearly $15 million in debt, sparking headlines in the New York Times and The Guardian, and highlighting Ashton's nonprofit in the process.
"The game changed for us totally," Ashton said of the national exposure.
Last year, the organization received $2 million in donations, which included in-kind donations such as pro bono legal aid and office space. It has six full-time employees, two part-timers and a "handful" of volunteers around the country.
"This year we'll probably be closer to $5 million," Ashton said.
Information from: Mail Tribune, http://www.mailtribune.com/