Washington State Alleges Overcharging and Aggressive Collection Tactics
Seattle – In a significant settlement to resolve allegations of overcharging and aggressive collection tactics, Providence health care system has announced its decision to refund nearly $21 million in medical bills that were paid by low-income residents of Washington. Additionally, the organization plans to erase $137 million in outstanding debt for tens of thousands of others. The settlement comes just weeks before the case was set to go to trial, with Washington State Attorney General Bob Ferguson leading the charge against Providence Health and Services, which operates multiple hospitals in Washington.
Violation of Washington’s Charity Care Law
The allegations put forward by the state argue that Providence’s practices violated Washington’s charity care law, which is considered one of the strongest in the country. This law requires hospitals to inform patients about the availability of financial aid and screen them for eligibility before attempting to collect payment. It was discovered that Providence trained its staff not to accept patients’ claims of being unable to afford the bills.
Expectations of Nonprofits
Attorney General Bob Ferguson emphasized the expectations placed on hospitals, especially nonprofit organizations like Providence, to provide access to affordable healthcare. These organizations receive tax breaks and other benefits in exchange for their commitment to helping everyone receive the care they need. Failure to fulfill these expectations is seen as taking advantage of the system.
Expanding Coverage and Eligibility for Assistance
Washington’s charity care law has recently been expanded, now covering approximately half of the state’s residents. This expansion allows them to be eligible for free or reduced-cost care at hospitals. The law applies to out-of-pocket hospital costs, including co-pays and deductibles. Individuals earning up to four times the federal poverty standard may qualify for financial assistance, with discounts ranging from 50% depending on the hospital.
Providence’s Commitment to Change
Providence Health and Services has acknowledged the need for change and simplification in providing information about financial aid to patients. The organization is working towards making the application process clearer and ensuring that charity care and financial assistance are readily available to those who cannot afford healthcare. Providence has already erased $125 million in medical debt following a previous lawsuit, and Chief Financial Officer Greg Hoffman reiterates their commitment to meet the needs of those they serve.
Refunds and Debt Erasure
As part of the settlement, approximately 65,000 patients will have their outstanding debt erased, while 34,000 patients will receive refunds with 12% interest for bills they managed to pay despite difficult circumstances. The debts being erased range from small amounts to as high as $262,000, while refunds will vary from under $1 to $293,000.
Impact on Patients
The settlement has already had a profound impact on patients like Kevin and Evangeline Holloman, who spoke at the news conference. After the birth of their daughter in 2020, they received a bill of $7,000 from Swedish Hospital in Seattle. When they missed a payment, they were immediately sent to a collection agency without any notification. The couple had to deplete their emergency savings and utilize their tax return to pay off the balance, forcing them to start from scratch. Their story highlights the devastating effects of unexpected medical bills and aggressive collection tactics.
Future Implications and Enforcement
Experts believe that this settlement could serve as a precedent for other states to strengthen their charity care laws or enforce existing ones more effectively. Washington’s comprehensive charity care law sets an example for other states, and the seriousness with which state attorneys general are approaching these cases may have a chilling effect on hospitals nationwide.
Overall, Providence’s decision to refund medical bills and erase outstanding debt is a significant step towards rectifying the alleged violations and ensuring access to affordable healthcare for all.
