Providence Health & Services is fighting a Washington state lawsuit accusing hospitals in the system of “unfair and deceptive” debt collection practices targeting the poor.
The lawsuit, filed in King County Superior Court by state Attorney General Bob Ferguson, cites internal emails, training documents and interviews with employees of Providence in Washington. He is referring to practices he says were designed to extract payments from people despite their eligibility for charity-funded hospital care or even Medicaid, the federal program that guarantees free health care to the poor.
It’s unclear to what extent the alleged practices may have taken place in Oregon, where the health system operates eight hospitals. An internal email cited by Ferguson to show internal concerns about the practice was written by a regional manager who oversees Oregon as well as Washington.
“We send the poor to bad debt,” she wrote, according to the lawsuit.
A spokesperson for the Oregon Department of Justice said no similar investigation into Providence was underway in Oregon.
A spokesperson for Providence, Oregon declined to say whether Ferguson’s targeted collection program was also being rolled out in Oregon. However, she echoed the system’s claims that the allegations are inaccurate, sending a statement via email.
“The allegations in the complaint do not accurately or fairly describe the spirit and intent of our practices at Providence, which are designed to help us care for everyone, regardless of our ability to pay,” the statement said. communicated.
The Washington state lawsuit claims Providence hired consultant McKinsey & Company to institute a collections program called “RevUp,” which explicitly trained employees in sophisticated techniques to extract funds from patients, regardless of their means of payment.
“Rather than screening patients for eligibility for charity care, Providence trains and encourages its agents to make it appear as if all of its patients are obligated to pay for their care, regardless of income level,” said the trial. “Even when Providence identifies patients who qualify for charity care, it sends many of their accounts to debt collectors in hopes of extracting some payment from patients Providence knows cannot afford to pay. “
The sequel added that Providence did so “while paying lavish compensation to its leaders and receiving tax benefits based on its nonprofit status.”
The lawsuit provides more details about RevUp, citing pressure techniques including “a closing statement that gives the misleading impression that it may send the patient’s account to a third-party debt collection agency (Debt Collector) that could harm to the patient’s credit if the patient does not pay immediately.However, the law prohibits debt collectors from engaging in credit reports for another seven months from the time this final statement is sent.
In a later Washington filing, a state attorney wrote that last month “Providence attorneys said Providence stopped sending Medicaid-enrolled patients to third-party collections agents beginning in December 2021, and that it recalled all active accounts associated with patients enrolled in Medicaid Mr. Fisher said Providence continues to refer patients with estimated household incomes between 151% and 200% of the federal poverty level to agents third-party recovery.
The response to Ferguson that Providence filed in court, however, describes his quotes as taken out of context by the state and claims the system provides “the most free and discounted care in Washington state.”
The spokesperson for Providence in Oregon said Providence has doubled the amount of financial aid given in the state each year to $150 million, including nearly $61 million in free and low-cost care in 2020, adding that the system “does not engage or have authorized any third-party agency to engage in” wage garnishment, charging interest, reporting accounts to credit rating agencies, or l initiation of lawsuits and privileges against patients.
“In Oregon and across states, Providence is committed to working with patients through any financial issue, and we continue to offer a range of options to best support them, including charitable care,” it said. she declared.
The seven-state system earlier reported that while overall revenues were up for the nine months of 2021 compared to the same period a year earlier, costs were also up. The system posted an operating loss of $405 million for the nine months, on revenue of more than $20 billion.
But, separately, Providence’s investment portfolio gained $937 million over that period, reaching about $13 billion, which more than offset the operating loss.
You can reach Nick Budnick at [email protected] or @NickBudnick on Twitter.