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Washington Attorney General sues Providence hospitals over 'unfair' medical billing practices

The suit alleges the hospital system did not inform eligible patients about free or reduced care options through the Charity Care Act.

EVERETT, Wash. — Washington state Attorney General Bob Ferguson said a trial is moving forward in a legal case alleging Providence hospitals used "unfair and deceptive" medical billing practices for low-income patients.

Providence denies the allegations, saying it holds all to the "highest standards and do not condone billing or collection practices that take advantage of the patients we serve, especially those who are vulnerable."

On Friday, the judge presiding over the case declined the state's motion for summary judgment, meaning the judge did not agree with the state's motion arguing there was a violation of the consumer protection act. The AG's office said the trial is still moving forward.

Ferguson filed the suit in 2022, and plans to argue in an upcoming hearing that 36,000 patients that were eligible for charity care were wrongfully sent to debt collectors.

"Washington state law is explicit that many Washingtonians qualify for something called charity care, in other words, reduced medical expenses," Ferguson said. "In this case, Providence simply, flagrantly ignored those laws and literally sent tens of thousands of Washingtonians that would have been sent to debt collectors to collect on debt they never should have owed." 

When Alexandra Nyfors of Everett faced a two-week hospital stay in a Providence-run facility due to an infection, kidney failure and associated issues, she said the medical care itself was excellent -- but the billing process that followed brought hardship. 

"The care I got was first-rate, particularly the nurses were just wonderful - and I got better, I'm not well but I'm better, well enough to be home and living my life," Nyfors said. "The billing practices are awful. They just didn't pay any attention to anything except 'Give us our money'."

Nyfors says her initial hospital bill was more than $86,000, and after insurance was whittled down to around $2,000 -- an amount she still could not afford on a fixed income. She was able to secure an installment payment plan, but says she was never told she was eligible for free or reduced costs under the state's Charity Care Act. Instead, she found a way to pay each month -- she says, skimping on heating bills to afford the fees.

"I wasn't buying much in the way of groceries so I was cold, I was not getting a reasonable diet because that's what you buy when you don't have money," Nyfors said. 

Nyfors learned through media coverage of the Attorney General's lawsuit that she may be eligible for the Charity Care Act. She contacted a reporter with the Everett Herald, and says after coverage of her case, Providence contacted her with information about the CCA and paid her back. Still, she agreed to take part in a lawsuit regarding the issue -- saying she'd like to see better patient notification about the CCA, and hospital personnel assigned to working with patients on billing. 

"It seems to me that what needs to change is, it needs to be somebody's responsibility in the hospital system, when a patient comes in to find out what their income is and if they qualify for Charity Care make sure they get it," Nyfors said. "That's part of caring for your patients and it seems to me is that's the part of care that's been completely dropped by the hospital system."

The attorney general's lawsuit asks for restitution, damages and corporate reform.

"We know medical debt is a key driver for homelessness and economic insecurity and the idea that an entity this size and sophistication of Providence would ignore this law to the tune of sending 36,000 Washingtonians to debt collectors that never should have been sent to debt collection, it's why we have my office, so we can stand up for those Washingtonians -- and that's why we're in court taking them on."

Here's the full statement from a Providence spokesperson:

"Providence is driven by a belief that health is a human right and remains focused on ensuring that financial hardship never gets in the way of accessing care or the healing process. We hold ourselves to the highest standards and do not condone billing or collection practices that take advantage of the patients we serve, especially those who are vulnerable.

According to the Washington Department of Health, Providence is the largest provider of charity care in the state of Washington. In 2021, we provided $75 million in free or discounted cared and $663 million in total community benefit across the state. Our charity care policies meet, and in many cases exceed, federal and state law.  

The discussion in today’s NYT Daily is a recap of a New York Times article from last October. We do not believe the podcast or the article are an accurate reflection of who we are as an organization. That said, we take these allegations very seriously and are continuously working to improve our charity care practices to ensure patients get the financial assistance they need."

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