YAKIMA — Some patients treated at 14 hospitals in Washington, including in Richland, Olympia, Walla Walla and Spokane, will share in $157.8 million in refunds and debt relief under an agreement reached by the state with Providence.
The agreement was filed in King County Superior Court on Thursday in a lawsuit brought two years ago by state Attorney General Bob Ferguson.
Almost 100,000 patients are eligible for refunds or debt relief, or have already received financial relief required by the new legal agreement.
Some of the hospitals include Kadlec Regional Medical Center in Richland, Swedish First Hill in Seattle, Providence St. Peter Hospital in Olympia, Providence Centralia Hospital, St. Mary Medical Center in Walla Walla, and Providence Holy Family Hospital and Sacred Heart Medical Center, both in Spokane.
In all, the lawsuit accused 14 nonprofit Providence hospitals in Washington of deceiving patients eligible for free care or discounted care based on their incomes into believing they had no choice but to pay their medical bill.
Hospitals in the lawsuit also unlawfully shifted the burden to patients to know they were eligible for financial assistance, according to Ferguson’s staff.
“Most Washingtonians are eligible for significant discounts on their out-of-pocket hospital expenses, including co-pays and deductibles,” Ferguson said.
The agreement filed in court Thursday requires Providence to pay $20.6 million in refunds, including 12% interest on payments, to about 34,200 patients.
The average refund will be about $478, with a wide range of amounts from less than $1 up to $293,000.
It also must forgive $137.2 million in outstanding debt for about 65,200 patients. It already has forgiven all but $11.4 million of that.
The average debt write-off will be more than $900 on debts not already forgiven.
Providence also must pay $4.5 million to the state Attorney General’s Office.
Eligible patients who received care at Providence hospitals between 2018 and October 2023 will receive a letter with information and do not need to take any action to receive a check or a notice that their debt has been written off, according to the Attorney General’s Office.
Former patients who have questions about their eligibility should call Providence at 855-229-6466, according to the Attorney General’s Office.
Families with income up to 300% of the poverty level may qualify for free care in some of the years covered by the settlement and families making more than that — such as a family of four with an income of up to $111,000 — may qualify for a 50% reduction in their out-of-pocket costs. Eligible income levels increased in 2022.
Providence Chief Financial Officer Greg Hoffman said patient files are being reviewed to make sure no patient eligible for a refund or debt relief has been missed.
“Serving those in need, regardless of their ability to pay, is at the very heart of Providence’s mission and values,” he said.
In 2022 Providence and its affiliates provided $117 million in free or discounted care and $575 million in the unpaid cost of Medicaid in Washington state, he said.
Lawsuit: Providence staff aggressive
Hospitals in Washington state are required to tell patients both verbally and in writing that charity care is available and check to see if patients are eligible for charity care before attempting to collect payment, according to Ferguson’s office.
The lawsuit alleged that Providence trained staff to aggressively ask for payment from patients who were likely eligible for financial assistance or billed them without determining if they qualified.
But in a training slide for Providence hospitals staff were told, “Don’t accept the first ‘No’,” when they ask patients how they want to pay.
Instead, ask for 50% payment or work on a payment plan, it said.
In thousands of cases, Providence knowingly sent low-income patients, including those relying on Medicaid, to debt collectors, according to the Attorney General’s Office.
Before the consent decree agreement was filed, Providence refunded nearly $230,000 to 1,497 Medicaid accounts as the Attorney General’s Office investigated billing practices and collections, according to the office.
Staff had already raised concerns, with one employee warning that, “We are sending the poor to bad debt and not treating them the same as other patients,” the Attorney General’s Office said, based on Providence records it found.
Even when Providence wrote off debt for patients it later determined were eligible for financial relief, it did not tell them about the write-offs and their eligibility for financial relief if they were patients in the future, according to the Attorney General’s Office.
In August 2022 Ferguson expanded his lawsuit against Providence to add debt collection agencies Harris & Harris and Optimum Outcomes. That issue is ongoing.
In recent years, Providence has undertaken a system-wide review of its financial assistance policies, billing-related communications to patients, financial aid applications and training materials, according to Providence.
It also has taken steps to prevent Medicaid patients from incorrectly being sent to collections.
Providence said it recognizes the challenges some people face that may lead to them not completing financial assistance applications and is making improvements to its processes to help.
The steps it is taking “will help ensure all patients can spend more time focusing on their health and less time worrying about medical bills or insurance coverage,” Hoffman said.
