Hospital Responds to Senator’s Inquiry About Collection Practices

If you want proof of why the accounts receivable management industry is shrinking, look no further than the responses provided by a hospital being sued by the Attorney General of Washington for being too aggressive to questions posed by a Senator investigating the facility’s debt collection practices.

As part of an answer where it talks about “continuously improving our practices around the use of third-party agencies” to collect on bad debt, Providence Health & Services noted that it has reduced the number of agencies it works with “in recent years” from 17 to two.

The answers were in response to a series of questions asked by Sen. Patty Murray [D-Wash.], who was looking into the hospital’s collection practices following the publication of an article in The New York Times that claimed the hospital put “pressure” it put on patients to pay their debts, even though they may have been eligible for charity care.

Providence was sued by the Washington AG back in February along with another hospital network for allegedly placing 54,000 accounts with collection agencies, even though those patients might have been eligible for charity care. The suit was amended back in August to include the collection agencies being used by the hospitals, accusing them of not providing certain disclosures to individuals.

Providence announced last week that it is refunding payments by more than 700 low-income patients who were charged for medical care that should have been free.

In his response to Sen. Murray’s inquiry, Dr. Rod Hochman, the President and Chief Executive of Providence said the facility has “provided clear instructions” to the two agencies it works with “that they are not to engage in any aggressive tactics, such as reporting to credit bureaus, garnishing of wages, charging interest or initiating lawsuits or liens.”

Dr. Hochman also detailed the procedures for assigning accounts to the two agencies and how it screens accounts to “identify those who may be of highest need,” which is “above the requirements of the law.”

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