Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

FOR IMMEDIATE RELEASE: 
Sep 22 2017

Capital aggressively pressured patients to pay without informing them of their charity care rights

OLYMPIA — Attorney General Bob Ferguson today filed a lawsuit against Capital Medical Center in Olympia, alleging it repeatedly violated Washington’s Consumer Protection Act by withholding charity care from thousands of low-income patients.

The lawsuit alleges that management at Capital Medical Center, a for-profit hospital, created a culture that elevated aggressive collection over access to charity care. Capital trained staff to pressure patients to pay for their treatment upfront without screening patients for charity care eligibility or providing notice of the availability of charity care.

According to the complaint, Capital’s focus on aggressive collection came from its management. Capital’s former CEO, Jim Giest, called collection and registration staff members the emergency department’s “money makers.” He said in a 2012 meeting that the hospital needed to “get something out of” every patient and told staff to not let uninsured patients “leave without paying anything.” 

Because of these coercive practices, thousands of charity care-qualified patients were forced to pay for their treatment upfront, incur medical debt or defer important medical care. 

“Capital’s unlawful collections practices prevented thousands of Washington’s neediest patients from receiving charity care,” said Ferguson. “I am committed to ensuring that all Washingtonians, regardless of income, have access to affordable care.”

Capital is a 110-bed, for-profit hospital owned by RCCH HealthCare Partners, which owns 17 hospitals in 12 states.

Washington state law requires all hospitals — for-profit and non-profit, public and private — to provide charity care to individuals who are near the federal poverty level. Hospitals are required to:

  • Provide notice of the availability of charity care both verbally and in writing;
  • Screen patients for charity care eligibility before attempting to collect payment, and;
  • Only require patients to provide one income-related document to prove charity care eligibility.

In the lawsuit, filed in Thurston County Superior Court, Ferguson alleges that Capital violated all of these requirements by training its staff to aggressively demand payment from patients without screening them for charity care eligibility or informing them of their charity care rights. Capital also required that patients produce multiple forms of income documentation to apply for charity care.

In a letter to patients who did apply, the hospital required patients to provide up to eight documents proving income, including written documentation from income sources, a current credit report and three pay stubs.

Capital trained its staff to present only upfront payment, payment plans and medical credit cards as payment options and only to provide information about charity care to patients who explicitly requested it.

A Capital patient reported that during registration for a scheduled procedure, a staff member demanded she pay upfront and in full. The staff member indicated that the procedure would not go forward unless the patient either paid the full amount or signed up for a medical credit card offered through Capital. 

The patient signed up for the credit card because she could not afford to pay for her treatment upfront and she felt that she would not receive care otherwise. The patient received no information about charity care during this interaction.

Capital’s Patient Access Department “cleared” uninsured patients before scheduling them for surgery. During clearance, staff members informed patients of the cost of their treatment, assessed their ability to pay this amount and attempted to reach a negotiated payment arrangement.

The complaint alleges that in 2012, an uninsured, unemployed patient attempted to schedule a surgery with Capital. Instead of providing a charity care application after the patient offered to pay through a payment plan, the Patient Access Director decided they “will not move forward with this patient.” 

When Capital’s financial counselor informed the patient that Capital would not schedule her surgery, she offered to pay a down payment. The financial counselor explained that Capital “would not move forward without payment in full,” even after the patient requested more information about her payment options.

During pre-treatment collection calls, Capital threatened to cancel medical appointments and surgeries if patients did not agree to make upfront payments. They did not screen patients for charity care eligibility during this process.

A patient reported that, in 2016, a financial counselor called asking the patient how she would like to pay for an upcoming treatment. The financial counselor offered her two payment options: pay in full and receive a 25 percent discount, or pay 50 percent down with a payment plan for the remainder. The counselor indicated that she had 48 hours to commit to one of these two options or her appointment would be cancelled.

The counselor did not give this patient any information about charity care or screen her for charity care eligibility during this call.

In a subsequent call, the patient specifically requested information about charity care. Capital’s financial counselor informed her that although she could request a charity care application at the hospital on the date of her treatment, she needed to commit to making a payment in advance because “Capital does not pre-approve patients for financial assistance.”

Capital provided cash bonuses and other incentives to staff who met collection targets. In an email to a team of emergency room registrars, Capital’s Patient Access Director emphasized collecting payment from “every patient, every time.”

Capital required staff members to attempt to collect a deposit from every patient in the emergency room, even those in hospital beds and gowns, regardless of their ability to pay. Capital continued to demand $200 deposits from uninsured patients even after it screened them for charity care. 

Capital’s aggressive collection practices reduced the amount of charity care it provided. Between 2012 and 2015, Capital consistently provided less charity care than the regional average, often less than 1 percent of its revenue.

For instance, in 2014, hospitals in Southwest Washington provided an average of about 6 percent of their revenue in charity care. Capital provided just .37 percent of its adjusted revenue in charity care that year, leaving Capital with the lowest charity care rate in both the region and in Washington State.

Ferguson’s lawsuit seeks to ensure that Capital Medical Center provides patients with notice of their charity care rights before requesting payment, properly screens them for charity care eligibility and ceases its aggressive collection practices. It also seeks restitution for low-income patients harmed by the hospital’s practices, in addition to civil penalties.

The state Consumer Protection Act allows for a civil penalty of up to $2,000 per individual violation. Capital’s practices impacted thousands of patients, limiting their access to charity care and financial assistance.

Assistant Attorney General Audrey Udashen is leading the case for the Attorney General’s Office.

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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.

Contacts: Brionna Aho, Interim Communications Director, (360) 753-2727; brionna.aho@atg.wa.gov