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Medical debt collectors added to wrongful billing lawsuit


Two medical debt collection agencies have been added to a Washington State Trial against 14 associated hospitals for alleged violations of consumer protection laws related to financial assistance practices, the the state attorney general announced.

The lawsuit, originally filed in February, primarily targets Providence Health System, which operates dozens of hospitals in Washington and other Western states, for its alleged mismanagement of financial aid and medical debt collection. The actions affected “tens of thousands of patients and hundreds of millions of dollars in medical debt,” according to the attorney general’s statement.

Harris & Harris and Optimum Outcomes, two national debt collection agencies, also violated the Collection Agencies Act and the Consumer Protection Act, according to the statement. Consumer complaints sent to the attorney general’s office prompted the agencies’ inclusion in the lawsuit, the statement said.

“Collection agencies cannot mislead Washingtonians about their legal right to access medical financial assistance,” Attorney General Bob Ferguson said in the press release. “I have fought to expand our Charitable Care Act so more people can have access to affordable healthcare – I will fight to ensure these laws are upheld.”

Violations listed in the lawsuit include the agencies’ failure to send notification of eligibility for financial assistance with initial debt collection requests to individuals, according to the lawsuit.

A new Washington law requires hospitals to forgive at least a portion of medical costs for qualified patients. It provides financial assistance to all state residents who earn less than three times the federal poverty level of $27,750 for a family of four. The law, which took effect July 1, also provides reductions for anyone earning less than four times the federal poverty level.

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

The attorney general’s office said about 54,000 low-income patient accounts were referred by Providence to debt collection agencies, and those accounts held more than $470 million in unpaid medical debt.

Providence hired Harris & Harris and Optimum Outcomes in September 2019 to begin collecting medical debts on behalf of the health care system, according to the lawsuit.

The original trial included nine Providence hospitals, including the largest in Washington state, according to the press release. He accused hospitals of violating consumer protection law ‘thousands’ of times, including training employees to ‘aggressively collect payments without regard to a patient’s eligibility for aid. financial,” Ferguson’s office said.

The lawsuit seeks full cancellation of medical debts as well as reimbursements, including interest, for patients who did not receive qualified financial assistance. The attorney general’s office will also seek “millions of dollars in civil penalties,” but the total number of violations has yet to be determined.

Collection agencies could not immediately be reached for comment. However, Providence said in a statement to MedPage today that the allegations were not an accurate representation of the company’s financial relief efforts in the state.

“We continue to firmly believe that the charges against the Providence Family of Organizations in Washington State are inaccurate and unjust,” a spokesperson for Providence said. “Charitable care and financial assistance is central to our mission as a nonprofit organization. As the largest provider of charitable care in Washington State, the Providence family of organizations has provided 75 $.5 million in free and discounted care statewide in 2021 alone. We also absorbed $471 million in uncompensated Medicaid costs last year in Washington State. Our Practices meet, and in many cases exceed, the requirements of Washington’s Charity Care Act In fact, our charitable care eligibility threshold is at least twice as generous as Washington State standards. “

  • Michael DePeau-Wilson is a reporter on the business and investigative team at MedPage Today. It covers psychiatry, the long covid, and infectious diseases, among other relevant US clinical news. Follow