Washington State Attorney General Bob Ferguson recently announced a consumer protection lawsuit against five Swedish hospitals and nine Providence-affiliated facilities alleging that they failed to ensure that eligible low-income Washingtonians receive the discounts to which they are legally entitled. In addition, the lawsuit also alleges that the companies aggressively tried to collecting money from people who were eligible for charity care.
According to the Attorney General’s Office (AGO), Ferguson will also file a motion for preliminary injunction unless the hospitals agree to stop their alleged conduct while the case is ongoing.
Washington’s charity care law protects low-income Washingtonians from out-of-pocket hospital costs. The protections apply to both insured and uninsured patients.
Ferguson’s lawsuit, filed in King County Superior Court, asserts that these hospitals, which reportedly had more than $18 billion in patient service revenues in 2020, committed thousands of Consumer Protection Act violations, including:
• Training employees to aggressively collect payment without regard for a patient’s eligibility for financial assistance, instructing them to use a specific script when communicating with patients that gives patients the impression that they are expected to pay for their care.
• Failing to notify patients they were eligible for charity care financial assistance when the providers determined they qualified for assistance;
• And sending more than 54,000 patient accounts to debt collection, despite allegedly knowing the patients were eligible for financial assistance. These 54,000 patient accounts totaled more than $70 million. Under Washington’s current charity care law, according to the AGO, those patients were eligible for discounts on their bills. Moreover, under its own charity care policies that Providence promoted, these patients should have been eligible for full write-offs of their medical debt.
According to the AGO, the hospitals’ conduct began in 2018. Much of their allegedly conduct continues to this day, the lawsuit asserts, despite the Attorney General’s Office investigation and previous lawsuits Ferguson has filed against other hospitals over similar practices. The AGO maintains that a Providence financial executive admitted in a deposition in November that the hospitals continue to send patients eligible for financial assistance to collections.
“Charity care helps low-income families avoid crushing medical debt by making financial assistance available to those who qualify,” Ferguson said. “Hospitals cannot deceive Washingtonians about their legal right to access medical financial assistance. They must follow the law, and ensure low-income patients have access to the resources they need.”
The lawsuit seeks restitution in the form of full write-off of medical debts, and refunds, plus interest, for patients who did not receive financial assistance. In addition to the $70 million in debt relief and refunds, Ferguson is also seeking millions of dollars in civil penalties. The total number of Consumer Protection Act violations will be determined as the case progresses.
Aggressive collection practices
Washington’s charity care law requires all hospitals — for-profit and non-profit, public and private — to forgive some or all of the out-of-pocket cost of essential health care for low-income patients who qualify. The law covers Washingtonians whose household income is at or below 200 percent of the federal poverty level.
Hospitals are required to provide notice of the availability of charity care both verbally and in writing and screen patients for charity care eligibility before attempting to collect payment.
Ferguson’s lawsuit claims that Providence, Swedish and Kadlec developed and encouraged a corporate culture that prioritizes collection over charity care, aggressively attempting to collect payment at the time of treatment and continuing to collect post-treatment even when the hospitals know that a patient is eligible for financial assistance. The AGO’s investigation revealed that the hospitals train employees to ask for payment in a way that implies that payment is expected, while allegedly obscuring a patient’s right to apply for charity care.
The lawsuit also claims that after treatment, the Providence-affiliated hospitals also fail to inform patients they know are charity care-qualified.
Lawsuit seeks restitution for patients, corporate reforms
Ferguson’s lawsuit asserts that the conduct of the Providence-affiliated hospitals violates Washington’s Consumer Protection Act. The alleged violations include:
• Failing to screen patients for charity care eligibility before attempting to collect payment, as required by law
• Concealing the availability of charity care with aggressive collection tactics
• Deceiving patients by failing to notify them when they knew that they were care-eligible
• Continuing to attempt to collect payment from patients they identified as eligible
The lawsuit asks the court to force the hospitals to stop these practices. Ferguson is seeking refunds — including interest — for patients who paid for care when they were eligible for financial assistance. Ferguson is also seeking debt relief or forgiveness in the form of full write-offs for eligible patients who still owe money.
Ferguson is also seeking millions of dollars in civil penalties for thousands of individual violations of the state’s Consumer Protection Act. The total number of Consumer Protection Act violations will be determined as the case progresses.
If you paid for medical services or are in collections for a medical bill from a Providence or Swedish hospital or Kadlec Regional Medical Center, and believe you may be eligible for charity care, contact Attorney General’s Office Investigator Bau Vang at 206-516-2989 or by email at bau.vang@atg.wa.gov.
