A group of eight hospitals in Washington State will forgive $20 million in unpaid medical bills, refund $2.2 million back to patients, pay $2.5 million to the state’s attorney general, and rehabilitate the credit of thousands of individuals who qualified for charity care but did not receive it, according to the terms of a settlement that was announced yesterday.
The original lawsuit was filed against St. Joseph Medical Center in Tacoma, but the settlement includes seven additional hospitals that are part of the CHI Franciscan network.
Over a six-year span, between 2012 and 2017, the hospitals were accused of violating the state’s Consumer Protection Act by not making charity care available to those who qualified. In fact, the hospital and the revenue cycle management company it used allegedly went out of their way not to volunteer information about charity care. One former employee said that they were only allowed to bring up the topic of charity care once a deposit had been made on a medical bill.
Hospital senior managers became aware of the issue as early as 2014, but apparently did not do anything, even after the hospital’s chief financial officer noted that the situation could “backfire” on the facility.
More than 5,000 individuals who likely qualified for charity care, but made payments on their bills, will receive the $2.2 million in refunds. The accounts for an additional 7,000 former patients — who collectively owe $26 million — will be screened to see if they qualify to have their debts forgiven.
“Medical debt is one of the leading reasons why families get trapped in poverty,” said Bob Ferguson, Washington’s attorney general. “Hospitals are required to inform low-income patients about the availability of charity care. St. Joseph failed to live up to its duty, and imposed obstacles on vulnerable Washingtonians trying to access affordable care. Today’s resolution rights a wrong committed against thousands of patients across Washington.”
In response to the settlement, a spokesman for the hospital’s parent company said, “We provided $25 million in charity in 2018 alone. Neither the AG, nor our records, indicate any patient who applied for charity care was ever denied if they qualified. Out of an abundance of caution, we are exceeding the requirements of state law and providing charity compensation to patients who may be in most need, even if they never applied for charity care or did not actually qualify at the time of service.”