Tamara Niles cautioned against using inexperienced people to collect unpaid hospital bills and asked that her firm be compensated for accounts it already started working on, if the hospital hired somebody to do collections.
Emails provided to the CourierTraveler through an open records request this week reveal the back and forth between Niles and South Central Kansas Medical Center CEO Jeff Bowman, which was discussed at a special meeting of the hospital trustees on Monday.
At the meeting, Bowman explained to the board his decision to stop using Niles for collections and to hire Soule and Giles, the firm that is now legal counsel for the medical center.
Bowman accused Niles, who was not at the meeting and declined to comment afterward, of threatening to sue and to intimate him with records requests.
In the email exchange, Niles stated that her agency had a collection average of 26.17 percent, which she said exceeds the national average by almost 11 percent.
“We spend significant time on training to ensure we are up to date on new methods of recovery, and we are the largest debt collector in Cowley County,” she said.
Bowman told the trustees that he estimated the hospital could save $50,000 a year using Soule and Giles because they would take 25 instead of 30 percent of what is collected.
In an email, Niles, who is also the city attorney, advised Bowman that the rules regarding federal collections were complex and the procedures for those operations require extensive training and specialized software.
She also requested that Bowman put the work out for public bid, instead of awarding it to a law firm that might not have the specialized knowledge and experience.
When asked Wednesday about the firm’s training in collections, Chad Giles said his firm would not have taken on the task of collections if they were not confidant of their abilities to do so.
“Collections have always been a part of our firms practice in one way or another,” he said. “We are familiar with the applicable rules of law on the subject.”
In his email terminating Nile’s services, Bowman praised Niles for her work but said he felt it was in the interest of the hospital to use the same law firm that represents the hospital, to also handle collections.
“This is in no way a reflection of your work,” he said. “But merely a difficult and necessary business decision.”
Bowman instructed Niles on June 5 to work with the SCKMC attorneys in order to make the transition as smooth as possible. Soule and Giles will officially take over those accounts on June 25.
On June 16, Niles emailed the SCKMC attorneys, saying that it would take time to gather the requested information. She also indicated that the decision to switch firms could be delayed.
“I understand from the trustees that this matter is going to be delayed,” she stated.
The SCKMC trustees, who also serve as city commissioners, said on Monday they had not discussed the matter with Niles and had given no indication of a delay.
On Wednesday, Vice Mayor Karen Welch added, “I don’t recall us saying anything of that nature as a group.”
Niles added that said she had received the collection agreement authorizing Soule and Giles to serve as exclusive collectors as of June 25, but said under Kansas-Attorney Ethics Rules, the agreement would not be binding if the trustees should decide to delay that change.
The trustees, who are also the city commissioners, did not delay the decision. Trustee chair Jay Warren said who to hire for collections is up to the CEO, not the board. Warren did not return messages Wednesday seeking further comment.
Niles also indicated in an email to SCKMC attorneys that they apparently had not considered the issue of quantum meruit, which refers to agreements or contracts that have not been fulfilled.
She asked the law firm to forward their proposal for payment of the work she had already completed on accounts she had already worked on.
“I believe it would be better for all parties involved if we were able to reach a settlement of this claim,” she said. “Although it might not be necessary depending on the decision of the trustees.”
Niles has served SCKMC since 2012. That contract expired in 2015 and a new contract was not instituted.