Attorney General Bob Ferguson announced today the resolution of a 2017 lawsuit filed by his office against Tacoma’s St. Joseph Hospital that contended the hospital failed to adequately provide charity care to qualified patients.
The resolution will provide millions of dollars in restitution, refunds, and debt relief for patients who received care between 2012-2017 at hospitals owned by CHI Franciscan, St. Joseph Hospital’s parent company. The company owns hospitals in south King, Pierce, and Kitsap counties.
Ferguson’s 2017 lawsuit against St. Joseph Hospital stemmed from state laws requiring hospitals to provide access to free or reduced-cost medical care for low-income patients, Ferguson said at a press conference this morning. St. Joseph “repeatedly violated the Washington State Consumer Protection Act by withholding charity care from tens of thousands of eligible low-income patients from 2012 through 2017,” Ferguson said. Although the lawsuit was filed only against St. Joseph Hospital, CHI Franciscan agreed to extend the resolution to all eight of its acute-care hospitals.
State law requires all hospitals in Washington state to make charity care accessible to individuals who are at or below 200 percent of the federal poverty guidelines, Ferguson said. Hospitals must notify patients that charity care is available; must screen patients for charity care eligibility before attempting to collect payments; and must limit income-verification documentation to a single document. The attorney general’s lawsuit contended St. Joseph Hospital violated all three of those requirements.
Ferguson said employees at the hospital were trained to demand payment upfront before providing information about charity care. Reading from one of the hospital’s training materials, Ferguson said employees were instructed to “avoid phrases that give patients the option to not pay.” A former employee told the attorney general’s office that employees were told to “never volunteer information about St. Joseph’s charity care program to patients, even if they were obviously low-income or homeless.”
Cary Evans, CHI Franciscan’s vice president for communications and government affairs, provided the following statement in response to the lawsuit’s resolution: “As a nonprofit, charitable organization our mission emphasizes human dignity and social justice. Last year, we cared for 2.7 million patients and saw 324,611 emergency visits. We provided $25 million in charity in 2018 alone. Neither the AG, nor our records, indicate any patient who applied for charity care was ever denied if they qualified. Out of an abundance of caution, we are exceeding the requirements of state law and providing charity compensation to patients who may be in most need, even if they never applied for charity care or did not actually qualify at the time of service.”
Tens of thousands of affected patients will automatically receive notices in the mail with instructions on how to receive relief under the resolution, whether it’s in the form of refunds, debt relief, or both, Ferguson said. A third party is combing through records to identify patients who may be eligible for relief from the resolution, he added. More than 5,000 patients have already been identified as eligible for refunds to the tune of a total of $2.2 million. Additionally, the attorney general’s office estimates CHI Franciscan will be required to forgive up to $20 million in debt, although the numbers are still being finalized, Ferguson said.
The resolution also requires CHI Franciscan hospitals to provide charity care to patients who need it, make patients aware that charity care is available, and refrain from collecting payments from patients who appear to qualify for charity care, or who express interest in applying for charity care, before they have a chance to apply. All eight hospitals will continue to provide charity care to patients at or below 300 percent of the federal poverty line — 100 percent more than required by state law.
“Today’s resolution rights the wrongs committed against thousands of patients across Washington state and ensures this does not happen again at a CHI Franciscan hospital,” Ferguson said.