Heartland Health has settled a lawsuit with three people who alleged unsavory collections practices by Midwestern Health Management and Northwest Financial Services.

Financial terms of the settlement weren’t disclosed, but the settlement does help clarify the relationships between Heartland, Midwestern Health and Northwest Financial.

Heartland (a nonprofit umbrella company that includes the nonprofit hospital Heartland Regional Medical Center) owns the for-profit Midwestern Health, which collects patients’ debts. Midwestern Health collects debt through Northwest Financial — a company by name only, owned by Midwestern Health with a “fictitious registration,” according to the Missouri Secretary of State’s Office and the lawsuit.

As part of the settlement, Heartland agreed to file in federal court that it is the parent company of Midwestern Health. Also, future collections letters from Northwest Financial will refer to Heartland, according to Derek Potts, a lawyer for the plaintiffs.

Brett and Saundra Smith and Aaron Dillman, all of St. Joseph, filed the lawsuit last year through their attorneys, The Potts Law Firm and Yonke and Pottenger, of Kansas City. The lawsuit claimed Heartland was in violation of the Fair Debt Collection Practices Act by deceiving consumers about who it is that is collecting money from them.

Midwestern Health won a $4,231 judgment against the Smiths in 2007 in Buchanan County Associate Circuit Court. Midwestern Health had received a similar judgment against Mr. Dillman for $2,129 in 2006.

Prior to the settlement, the plaintiffs lost a motion to give the suit class-action status.

Heartland officials didn’t return messages seeking comment. Lawyers for both sides said the parties had signed confidentiality agreements as part of the settlement.

“We’ve resolved the differences, and the case is dismissed,” said Ronald Marney, one of Heartland’s attorneys in the lawsuit.

In its earlier legal response to the lawsuit, Heartland denied that it violated debt collection guidelines.

Heartland did admit to owning and sharing offices with Midwestern Health but had denied that Northwest Financial is closely affiliated with the hospital. Heartland denied “controlling” Midwestern Health.

Despite those denials, state records have long implied the ownership, shared resources and controlling status of Heartland, Midwestern Health and Northwest Financial.

Joe Blumberg can be reached

at joeblumberg@npgco.com.