Wash. AG Sues Hospitals Over ‘Aggressive’ Collection Efforts

The Attorney General of Washington has filed a lawsuit against a hospital network for failing to ensure that certain patients were legally eligible for charity care and “aggressively” collecting $70 million from those individuals.

The complaint was filed against Swedish Health Services and Providence Health & Services-Washington and accuses them of violating state law in Washington for failing to notify individuals who might have been eligible to receive charity care. The defendants allegedly have placed more than 54,000 accounts of such individuals with collection agencies dating back to 2018, with unpaid debts in excess of $70 million. The AG’s suit is seeking a preliminary junction to get the hospitals to stop its conduct while the case is ongoing. The AG wants the defendants to fully write off the unpaid debts, while refunding those who did make payments but should have received financial assistance. The suit is also seeking millions of dollars in civil penalties.

Among the allegations made in the complaint was 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. Providence instructed employees: ‘don’t accept the first no.’ “

Washington’s charity care law requires hospitals, whether they are for-profit or non-profit, to forgive some or all of the medical debt incurred by individuals whose incomes fall below certain thresholds. Hospitals are required to notify patients of the charity care options and screen them for eligibility prior to collecting payments.

The training materials allegedly encouraged employees to “continue pressing” for payments even after an individual said they were unable to pay their debt. From the AG:

If a patient declines the first request, the hospitals instruct employees to ask for partial payments up front, then attempt to commit patients to payment plans. If all else fails, the hospitals permit employees to discuss financial assistance.

Employees are also trained to use phrasing that gives patients the impression that “payment is expected.”

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