Insurance Dispute Putting Pressure on Patients : Health: Texas firm needs their help collecting $5 million owed to Garden Grove clinic group.

A Texas company is threatening to hold an estimated 18,000 Orange County residents hostage in a battle with a Garden Grove medical clinic group over records it needs to collect $5 million in insurance bills.

The company, Secured Asset Management Corp., purchased the bills last year from the clinics’ bankrupt former owner.

The clinics had advertised that they would accept whatever patients’ insurers would pay and would not bill individuals for the insurance deductibles or co-payments--effectively discounting their bills so patients would have no out-of-pocket expenses.

The clinics, which operated as Lehman Medical Group and then Harvard Family Medical, went bankrupt last year and Secured Asset Management, a Dallas company, bought uncollected medical bills--called accounts receivable--from the bankruptcy estate.

Now Secured has written to 2,000 former clinic patients asking that they authorize the clinics’ new owner to release their medical records to Secured so it can provide their insurance companies with the medical data they demand to validate the clinics’ bills.

“Failure to do so will leave us with no alternative but to hold you totally responsible,” the letters state. The letters, sent by a collection agency on behalf of Secured Asset Management, ask the patients to comply within 15 days.

The four clinics now are owned by a physician group and operate as Your Family Medical Group.

J. Christopher Mallick, Secured Asset Management’s president, said Wednesday that despite its tone, the aim of the letter was not to intimidate the patients but to appeal for their help in obtaining the documents from Your Family Medical Group. He said the company had agreed to provide access to the medical records when Secured purchased the bills but has since refused to forward any of them.

Kevin Olsen, the clinic group’s administrator, declined to comment except to say that the company would have no problem releasing the documents to patients at their request.

A former Lehman/Harvard patient, Gordon Tornberg of Garden Grove, is concerned that if he authorizes Your Family Medical Group to release his records, he or his insurance company might be forced to pay for services that were fraudulently billed.

In 1992, Dr. Kent Walter Lehman, founder of the clinics, chose not to contest charges of insurance fraud filed against him by the state medical board. He gave up his medical license and the clinics were acquired by Harvard Family Medical, which subsequently filed for bankruptcy.

Mallick says that the patients are not his target.

“I prefer to bill the insurance companies and collect a fair profit down the road. . . . I don’t care to chase patients for bills they don’t believe they owe,” he said.

He acknowledged, however, that if other efforts fail, he may try to collect from patients who did not have written agreements waiving their financial responsibility.

He also said that Secured Asset will attempt to collect co-payments from patients who are insured by Medicare or HMOs, which require patients to make co-payments.