Medical debt collectors join wrong billing lawsuit

Two medical debt collection agencies have been added to Washington state’s lawsuit against 14 associated hospitals for violating consumer protection laws related to financial assistance practices, the Washington State Attorney General announced .

The lawsuit, originally filed in February, focuses on Providence Health Care, which operates dozens of hospitals in Washington and other Western states, accusing it of financial aid and medical debt Improper handling of collections. The actions impacted “tens of thousands of patients and hundreds of millions of dollars in medical debt,” according to the attorney general’s statement. , also violated the state’s Collection Agencies Act and Consumer Protection Act, the statement said. Consumer complaints sent to the attorney general’s office prompted the agencies to participate in the lawsuit, the statement said.

“Collection agencies cannot defraud Washingtonians of their legal right to receive medical financial assistance,” Attorney General Bob Ferguson said in a press release. “I’m working to expand our charity care laws so more people have access to affordable health care — and I’ll work to make sure those laws are followed.”

According to the lawsuit, the lawsuit includes The agency failed to send individuals a notification of financial assistance eligibility for a first debt collection request.

A new law in Washington requires hospitals to forgive medical bills for at least some eligible patients. It provides financial assistance to all state residents whose families of four earn less than three times the federal poverty level of $27,750. The law, which went into effect July 1, also provides a discount for anyone with income less than four times the federal poverty level.

In addition to failing to notify eligible individuals, the attorney general accused debt collection agencies of failing to inform individuals of their right to request information about their debts.

Providence referred to debt collection agencies the accounts of an estimated 54,000 low-income patients holding more than $470 million in outstanding medical debt, the Attorney General’s Office said .

Providence contracted with Harris & Harris and Optimum Outcomes in September 2019 to begin collecting medical debt on behalf of the health system.

The original lawsuit included nine Providence hospitals, including the largest hospital in Washington state, according to the press release. Ferguson’s office said it accused the hospital of “thousands of times” violations of consumer protection laws, including training staff to “aggressively collect payments without regard to a patient’s eligibility for financial assistance.”

The lawsuit seeks full cancellation of medical debt and refunds, including interest, for patients who did not receive qualified financial assistance. The attorney general’s office will also seek “multi-million dollar civil penalties,” but the total number of violations has not yet been determined.

The collection agency could not be contacted immediately for comment. However, Providence said in a statement to MedPage Today that the allegations do not accurately describe the company’s efforts around financial aid in the state .

“We remain convinced that the allegations against the Providence, Washington, family organization are inaccurate and unfair,” a Providence spokesman said. “Charity care and financial aid are at the heart of our mission as a nonprofit. As Washington State’s largest provider of charity care, the Providence Family Organization provides $75.5 million in free and discounted care statewide. Only 2021. Last year, we also absorbed $471 million in unpaid Medicaid costs in Washington state. Our practices meet and in many cases exceed the requirements of the Washington Charity Care Act. In fact, our charity care eligibility threshold is at least Two are several times more generous than Washington State standards.”

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  Michael DePeau-Wilson is a reporter with MedPage Today’s Corporate and Investigations team. He covers psychiatry, chronic covid and infectious diseases, and other relevant U.S. clinical news. follow