Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

FOR IMMEDIATE RELEASE: 
Aug 9 2022

Harris & Harris and Optimum Outcomes illegally failed to notify tens of thousands of patients of the availability of charity care

SEATTLE — Attorney General Bob Ferguson announced that he expanded his lawsuit against 14 Providence-affiliated hospitals, including five Swedish hospitals, by adding two collection agencies that worked for the hospitals. The Attorney General’s underlying consumer protection lawsuit stems from Providence’s charity care and collections practices impacting tens of thousands of patients and hundreds of millions of dollars in medical debt.

When sending a first collection notice, collection agencies must include written notice that an individual may be eligible for charity care. Acting as Providence’s agents, Harris & Harris and Optimum Outcomes illegally failed to inform patients about the availability of charity care discounts before aggressively collecting on their medical debt. These collection agencies also illegally failed to inform patient of their right to request certain information about their debt.

The amended lawsuit, filed in King County Superior Court, asserts Harris & Harris, and Optimum Outcomes, violated the Washington state Collection Agency Act and Consumer Protection Act.

Washington’s charity care law protects Washingtonians from out-of-pocket hospital costs. The protections apply to both insured and uninsured patients. It requires all hospitals — for-profit and non-profit, public and private — to forgive some or all of the out-of-pocket cost of essential health care for patients who qualify. Thanks to legislation Ferguson requested, which took effect July 1, all Washingtonians within 300 percent of the federal poverty level are eligible for financial assistance, with discounts up to 400 percent of the federal poverty level for the vast majority of Washington hospital beds.

“Families live in fear that an unexpected medical emergency could result in crushing medical debt,” Ferguson said. “Collection agencies cannot deceive Washingtonians about their legal right to access medical financial assistance. I fought to expand our charity care law so more individuals can have access to affordable health care — I am going to fight to ensure those laws are honored.”

If you paid for medical services or are in collections for a medical bill from a Providence or Swedish hospital or Kadlec Regional Medical Center, and believe you may be eligible for charity care, contact Attorney General’s Office Investigator Bau Vang at 206-516-2989 or by email at bau.vang@atg.wa.gov.

Debt collectors violated the law while collecting on more than $470 million in medical debt

Ferguson added the collection agencies to the lawsuit when the Attorney General’s Office received consumer complaints that demonstrated the debt collectors failed to include the required charity care disclosures.    

Both collection agencies entered into a contract with Providence in September 2019. The agreement allowed them to collect hospital debts on Providence’s behalf and act as its agents.

When sending a first collection notice, collection agencies must include:

  • Written notice that an individual may be eligible for charity care;
  • Contact information for the hospital; and
  • Notice that the patient has the right to request the hospital account number assigned to the debt, date of last payment, and an itemized statement stating whether the patient was found eligible for charity care, and, if so, the amount due after all charity care has been applied.

Harris & Harris and Optimum Outcomes illegally failed to include this information in its initial collection letters.

In its agreement with Optimum Outcomes, Providence directed Optimum Outcomes to provide information to debtors about charity care only if patients asked for that information, which violates the requirement that debt collectors notify all debtors of the availability of charity care in their initial collection notice.

The Attorney General’s Office estimates that Providence referred more than 54,000 accounts of low-income patients to debt collection agencies, including Optimum and Harris & Harris. These accounts had more than $470 million in medical debt outstanding.

The underlying lawsuit against Providence

In February, Ferguson filed the consumer protection lawsuit against five Swedish hospitals and nine Providence-affiliated facilities. These hospitals are located around the state, from Seattle to Spokane, Walla Walla to Everett. In their communities, many of the hospitals are either the largest, or the only hospital in their area. Swedish’s location at First Hill is the largest hospital in the state with over 800 beds. Together, these hospitals reported more than $18 billion in patient service revenues in 2020.

Ferguson’s lawsuit, filed in King County Superior Court, asserts that these hospitals committed thousands of Consumer Protection Act violations, including:

  • 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.”
  • Failing to notify patients they were eligible for charity care financial assistance when the providers determined they qualified for assistance.

This is the third major lawsuit Ferguson has filed related to charity care. Ferguson launched the investigation after receiving complaints about Swedish’s charity care practices.

The lawsuit seeks restitution in the form of full write-off of medical debts, and refunds, plus interest, for patients who did not receive financial assistance. In addition to the $70 million in debt relief and refunds, Ferguson is also seeking millions of dollars in civil penalties. The total number of Consumer Protection Act violations will be determined as the case progresses.

Assistant attorneys general Audrey Udashen, Will O’Connor, Aileen Tsao, Matthew Geyman, and Michael Bradley, investigators Matthew Befort and Bau Vang, paralegal Jen Killoren and legal assistant Josh Bennett are handling the case for Washington.

Previous AGO enforcement of Washington’s charity care law

Ferguson filed lawsuits against two other Washington hospitals for violating Washington’s Consumer Protection Act by preventing low-income patients from accessing charity care. 

As the result of a 2017 lawsuit, CHI Franciscan provided $41 million in debt relief and $1.8 million in refunds, in addition to rehabilitating the credit of thousands of patients who were not offered charity care when they were eligible at eight of its hospitals in Washington. CHI Franciscan also paid $2.46 million to the Attorney General’s Office to cover the costs of the investigation and enforcement of the Consumer Protection Act.

Ferguson also sued Capital Medical Center in Olympia the same year over its charity care practices. To resolve the lawsuit, Capital provided at least $250,000 in refunds and more than $131,000 in debt relief. In addition, Capital paid $1.2 million to the Attorney General’s Office.

Expanding charity care law and access

Starting in July, four million Washingtonians are qualified for free or discounted care at hospitals across Washington as a result of legislation that Ferguson requested.

The legislation requires large hospital systems to provide more financial assistance. Beginning July 1, approximately half of all Washingtonians will be eligible for free or reduced-cost care at hospitals that represent approximately 80 percent of the licensed beds in the state.

Ferguson worked with prime sponsor Rep. Tarra Simmons, D-Bremerton, and Reps. Eileen Cody, D-Seattle, and Nicole Macri, D-Seattle, on HB 1616 to strengthen Washington’s charity care law. Ferguson’s Attorney General request legislation expands charity care eligibility to more than one million Washingtonians, and guarantees free hospital care to an additional million Washingtonians who are currently eligible for discounted care.

Ferguson also hosted a tele-town hall on the law in late June and will host further events in the coming months.

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Washington’s Attorney General serves the people and the state of Washington. As the state’s largest law firm, the Attorney General’s Office provides legal representation to every state agency, board, and commission in Washington. Additionally, the Office serves the people directly by enforcing consumer protection, civil rights, and environmental protection laws. The Office also prosecutes elder abuse, Medicaid fraud, and handles sexually violent predator cases in 38 of Washington’s 39 counties. Visit www.atg.wa.gov to learn more.

 

Media Contact:

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

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