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News / Health / Health Wire

Debt collection company for several Washington hospitals will pay $1M to settle lawsuit

By Annette Cary, Tri-City Herald
Published: February 21, 2024, 7:45pm

KENNEWICK — A debt collection company for Kadlec Regional Medical Center in Richland and other Providence hospitals will pay $1 million to the state of Washington after it was accused of failing to inform 160,000 patients of their medical debt collection rights.

Washington state Attorney General Bob Ferguson announced on Wednesday that an agreement had been reached with one of two Providence debt collection agencies, Harris & Harris, to resolve its part of a lawsuit filed by the state in King County Superior Court.

The state goes to trial Thursday Feb. 22 with the second Providence debt collection agency, Optimum Outcomes.

The agreement with Harris & Harris follows an announcement Feb. 1 that patients treated at 14 hospitals in Washington, including in Richland, Olympia, Walla Walla and Spokane, will share in $157.8 million in refunds and debt relief under an agreement reached by the state with Providence.

The original charity care lawsuit was filed against Providence in February 2022 and expanded six months later to add the two debt collection agencies. Both had contracts with Providence starting in September 2019.

The $1 million payment from Harris & Harris will pay for future consumer protection enforcement work.

Harris & Harris admitted no wrongdoing.

The Office of the Attorney General says that information that was withheld from patients may have prevented them from learning about and receiving financial help with their medical bills.

Both debt collection agencies were required to provide an initial written notice to patients that they may be eligible for charity care, a contact number for the hospital and a notice on what information it can request from the hospital. That should have included whether they had been found eligible for charity care and the amount owed after charity care relief was applied to their bill.

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Harris & Harris did not inform patients in the initial collection notice of their right to request detailed information about their medical debt and included its own phone number rather than the number for Providence, according to the Office of the Attorney General.

Optimum Outcomes failed to provide any of the required information in its first written notice to 82,759 patients, according to the King County court.

“Debt collectors must play by the rules,” Ferguson said. “Washingtonians have a right to know about certain protections related to medical debt, and debt collectors have an obligation to inform them of those rights.”

Providence to issue refunds

Under the agreement announced earlier with Providence, patients who were eligible for financial assistance but who were sent to collections and paid for their care will receive refunds, including interest. Other patients will have their debt written off.

Eligible patients who received care at Providence hospitals between 2018 and October 2023 will receive a letter with information and do not need to take any action to receive a check or a notice that their debt has been written off, according to the Office of the Attorney General.

Former patients who have questions about their eligibility should call Providence at 855-229-6466, according to the Attorney General’s Office.

Some families with income up to 300 percent of the poverty level may qualify for free care in the later years covered by the settlement and some families making more than that — such as a family of four with an income of up to $111,000 — may qualify for a 50 percent reduction in their out-of-pocket costs. Eligible income levels increased in 2022.

Providence Chief Financial Officer Greg Hoffman said patient files are being reviewed to make sure no patient eligible for a refund or debt relief has been missed.

“Serving those in need, regardless of their ability to pay, is at the very heart of Providence’s mission and values,” he said.

In 2022 Providence and its affiliates provided $117 million in free or discounted care and $575 million in the unpaid cost of Medicaid in Washington state, he said.