Hospital Sued for ‘Aggressive’ Collection Efforts Refunds Payments from Low-Income Patients

A nonprofit healthcare system that is being sued by the Attorney General of Washington and which was the subject of a profile in The New York Times for the “pressure” it put on patients to pay their debts has announced it is going to refund payments made by more than 700 low-income patients who were charged for medical services that should have been free.

A spokesperson for the hospital network, Providence Health & Services, said the charges were the result of an “unintended error” that occurred when it updated how it identified those who might be eligible for charity care, which caused some Medicaid patients to receive collection notices instead. Along with refunding any payments made, with interest, the hospital is also working with credit reporting agencies to address any negative impact that may have occurred on the patients’ credit reports.

In February, Providence was one of two hospital networks sued by the AG of Washington, which accused the hospitals of collecting $70 million from individuals who should have been eligible for charity care. The AG later amended the suit to include a collection agency working on behalf of Providence, claiming the agency failed to make certain disclosures. The agency denied the allegations. Last month, The Times published an article detailing the program that the hospital used to try and collect from individuals who may have been eligible for charity care and how a nonprofit facility could become so focused on collecting from low-income patients.

Providence becomes the latest in a string of announcements from healthcare providers and hospitals across the country that have made changes to their collection practices after being spotlighted because of tactics alleged to be too “aggressive.”