AG’s Office: Providence-affiliated hospitals failed to make charity care accessible to thousands

OLYMPIA, Wash. – The Washington Attorney General’s Office is suing Providence and Swedish-affiliated hospitals for failing to make charity care accessible to thousands of Washingtonians. 

Bob Ferguson’s office filed the lawsuit against nine Providence-affiliated facilities and five Swedish hospitals. 

The lawsuit was filed in King County, but the hospitals involved are located around the state, including Providence Sacred Heart Medical Center and St. Luke’s in Spokane. 

Ferguson alleges the facilities violated the Consumer Protection Act by failing to ensure that eligible, low-income people received the discounts they are legally entitled to. He says they aggressively collected money from charity care eligible, low-income Washingtonians. 

The lawsuit asserts these facilities did the following: 

  • Trained employees to “aggressively” collect payment without regard for a patient’s eligibility for financial assistance and instructed them to use a specific script when communicating with patients that gave the impression patients are expected to pay for their care. 
  • Failed to notify patients they were eligible for charity care financial assistance when the providers determined they qualified for assistance. 
  • Sent more than 54,000 patient accounts to debt collection, despite knowing they were eligible for financial assistance. 

Ferguson says those 54,000 patient accounts totaled more than $70 million. He alleges the conduct began in 2018 and much of it continues to this day. 

Charity care helps low-income families avoid crushing medical debt by making financial assistance available to those who qualify,” Ferguson said. “Hospitals cannot deceive Washingtonians about their legal right to access medical financial assistance. They must follow the law, and ensure low-income patients have access to the resources they need,” Ferguson said. 

Providence released the following statement Thursday: 

The Providence family of organizations is extremely disappointed that the Office of the Washington State Attorney General has chosen to file inaccurate and unfair charges against us regarding our charity care and financial assistance practices. Serving every person who comes to us, regardless of ability to pay, is a central tenet of our mission as a not-for-profit organization. We take this responsibility seriously.

As the largest provider of charity care in the state of Washington, the Providence family of organizations – which includes Providence, Swedish and Kadlec – delivered $79 million in free and discounted care statewide in 2020 alone. Our practices comply with, and in many instances exceed, the requirements of Washington’s Charity Care Act. In fact, our threshold for charity care eligibility is at least two times more generous than Washington state standards.

When the AG’s office first raised their concerns with us two years ago, we cooperated fully and in good faith. That is why it is inconceivable that the AG has chosen now to file this complaint, which runs counter to the facts we provided to his office. The state has depended on Providence to help get Washington communities through the pandemic, and the organizations’ caregivers have delivered every step of the way, compassionately caring for tens of thousands of COVID-19 patients from every walk of life and socio-economic background. Now, these same caregivers are faced with the equally daunting task of getting to the backlog of non-COVID care amid the nation’s worst shortage of health care personnel.

Providence remains unwavering in our commitment to working with patients through any financial issue, and we continue to offer a range of options to best support them, including charity care. Even still, it’s our practice to always look for ways to continually enhance our services and offerings for our patients and communities. If we find out we’ve fallen short of the high standards we hold ourselves to, we make immediate changes. This is something we’ve been committed to while working with the AG’s office and as our financial assistance and charity care practices and policy in Washington state were reviewed.

While we strongly disagree with the allegations in this complaint, we’ll continue to support policies that expand access to charity care and make health care more accessible to vulnerable patients. Providence has actively partnered with the Washington State Hospital Association to support the charity care bill currently in front of the Washington state legislature, as proposed by the AG.” 

Ferguson’s 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, he is also seeking millions of dollars in civil penalties.