By Jack Mayne The owners of Burien’s Highline Medical Center have been ordered to rehabilitate the credit of over 5,500 state residents to the tune of $25 million because they had qualified for charity care but did not receive it between 2012 and 2017. Attorney General Bob Ferguson said on Monday (April 29) that the CHI Franciscan hospitals, which include Highline, must pay as much as $20 million in personal debt, $2.22 million in refunds, and also pay the State Attorney General’s office $2.46 million for the cost of its lawsuit. As a result of this lawsuit, St. Joseph Medical Center in Tacoma and seven other CHI Franciscan hospitals, including Highline, have entered into a legally enforceable agreement that requires the health care corporation to reform its charity care practices across at all eight of its acute care hospitals. All eight hospitals Ferguson sued St. Joseph Medical Center, but the lawsuit resolution involves charity care reforms for eight CHI Franciscan hospitals and provides restitution for patients withheld charity care at all eight hospitals. “Medical debt is one of the leading reasons why families get trapped in poverty,” Ferguson said. “Hospitals are required to inform low-income patients about the availability of charity care. St. Joseph failed to live up to its duty, and imposed obstacles on vulnerable Washingtonians trying to access affordable care.” The April 29th agreement “rights a wrong committed against thousands of patients across Washington.” The resolution agreement was filed in Pierce County Superior Court but it affects thousands of Washington consumers who sought care at eight CHI Franciscan acute care hospitals. Must get debt forgiveness The resolution requires strategies to ensure any state resident who qualified for charity care but did not get it will get the relief they deserve, Ferguson’s statement says, and that every patient from January 2012 to December 2017 will have the opportunity to be forgiven or get refunds if they qualified for charity care, whether they had insurance or not. So far, Ferguson says at least 5,451 patients have been identified who will receive automatic refunds totaling $2.22 million. In addition, the Attorney General’s office anticipates that several thousand patients will receive automatic debt relief, totaling as much as $20 million. Case filed in 2017 The Attorney General’s Office filed a lawsuit against St. Joseph in 2017, charging that the hospitals repeatedly violated the state Consumer Protection Act by failing to make charity care accessible to low-income patients. Besides Highline, St. Joseph is one of eight acute care hospital systems in the state operated by CHI Franciscan. The others are St. Elizabeth Hospital, St. Francis Hospital, St. Anthony Hospital, St. Clare Hospital, St. Joseph Medical Center, and Harrison Medical Center. In Washington, state law requires hospitals to make charity care accessible to patients whose income is at or below 200 percent of the Federal Poverty Guidelines. Hospitals are required to provide notice of the availability of charity care both verbally and in writing. Also required is the screening of patients for charity care eligibility before attempting to collect payment. The law only requires patients to provide one income-related document to prove charity care eligibility. Demanded, threatened patients Ferguson’s lawsuit said St. Joseph violated all of these requirements and some of the unlawful practices continued until the AG’s office began its investigation. Ferguson said St. Joseph demanded payment from patients up to three times before providing information about the availability of charity care or screening patients for charity care eligibility. The hospital also required patients to provide several forms of income documentation to show they were eligible to receive assistance. St. Joseph’s revenue management contractor, Conifer, trained hospital staffs to use language designed to give patients the impression that they were required to pay for their care upfront. ‘Never volunteer information’ Former employees said they were told to “never volunteer information about St. Joseph’s charity care program to patients, even if they were obviously low income or homeless.” A 2015 “user guide” from Conifer directed employees to “avoid phrases that give patients the option to not pay.” A former employee told Attorney General Ferguson’s office investigators that she was trained to “encourage patients to pay the deposit by indicating that I could only provide them with a charity care application if they paid a deposit first.” Ferguson said this violates the law’s requirement that hospitals screen for charity care eligibility before attempting to collect payment. Even St. Joseph employee sued As early as 2014, St. Joseph senior management was aware of complaints about aggressive collection practices. The complaints included a patient who said that St. Joseph’s demand for a large upfront payment made him reconsider whether to have heart surgery. Another complaint came from one of St. Joseph’s own employees, who had difficulty accessing charity care for her own medical bills, the attorney general’s office said. The employee was assured her accounts were on hold while her charity care application was being processed, but then was served with a debt collection lawsuit over the accounts. Terrible news “This is terrible news from a very credible employee,” said Ferguson’s office. It reported that a senior vice president wrote when forwarding the September 2014 email, adding that the labor union representing some St. Joseph employees had relayed similar complaints. She noted the union “is telling us it happens on a regular basis.” St. Joseph Hospital chief financial officer, commented, “we probably need to shore up our processes. I’m afraid this is going to backfire on us if we are not very careful very soon.” Who will get relief All patients who received care at any of the eight hospitals between 2012 and 2017 will have the opportunity to receive relief, the Ferguson news release said. “All uninsured patients — likely tens of thousands of patients statewide — will receive an attestation form in the mail to receive relief. Patients should complete the attestation that their income was at or below 200 percent of the federal income level at the time of treatment,” the attorney general’s news release said. “Eligible patients will receive a refund or discharge of their medical bills. In addition to the blanket notification to uninsured patients, a third party is reviewing uninsured patient financial accounts for automatic relief. That third-party review so far has determined that CHI Franciscan withheld charity care from at least 5,451 charity-care eligible patients who paid some or all of their hospital bills. These patients will receive automatic refunds totaling $2.22 million. The attorney general said an additional third-party review will screen an estimated 7,000 uninsured patients who received care at a CHI Franciscan hospital between 2012 and 2017 for charity-care eligibility. These individuals owe approximately $26 million. Once charity-care eligible patients are identified, CHI Franciscan must forgive any unpaid medical bills. The AG’s office estimates that CHI Franciscan will provide up to $20 million in automatic debt forgiveness to thousands of patients burdened by debt as a result of its unlawful conduct. Most should get help The Attorney General’s Office says it expects most, if not all, affected patients to receive automatic relief as a result of these reviews. However, the notice and form will be mailed to all uninsured patients to ensure no one is missed. Moreover, CHI Franciscan is required to contact credit bureaus in order to rehabilitate patients’ credit that suffered because of the medical debt. CHI Franciscan will notify the credit reporting bureaus that their accounts are paid in full and request that they delete any reports indicating the medical bills were delinquent. Ferguson’s office says affected consumers should check their credit reports to ensure this happened. If it did not, they should contact the Attorney General’s Office at or 800-551-4636. Insured patients will not receive a notification in the mail. Those who believe they qualified for charity care when they received care should call CHI Franciscan at 888-779-6380 and request a charity care application. If they qualify, they will also receive refunds and debt relief of their out-of-pocket costs. Insured patients who are unable to provide income documentation from the time of their treatment will be able to provide a written statement to apply for charity care. In addition to relief for consumers, today’s agreement also requires the eight hospitals to not only comply with Washington’s charity care law, but to go above and beyond for the next five years, providing charity care to patients with an income up to 300 percent of the federal poverty level. Outreach and education St. Joseph entered into a legally binding agreement requiring St. Joseph to conduct a broad range of outreach efforts in the community:

  • In addition to restitution and debt discharge, St. Joseph will post information related to today’s resolution on its website and social media pages and in the facility’s public areas.
  • To ensure patients understand their right to receive charity care, St. Joseph will conduct outreach to patients through public meetings with five Washington community groups: Project Access of Pierce County, Lutheran Community Services, Aging and Disability Resources, South Sound Outreach and the Tacoma Urban League.
  • St. Joseph also will perform outreach at an organization that serves Spanish-speaking individuals and will provide notice of the settlement through local media outlets, including Spanish-language media outlets.
  • The Attorney General’s Office will use or distribute $100,000 of the $2.46 million payment from CHI Franciscan to provide outreach related to the availability of charity care in Washington state.
Ferguson said Assistant Attorney General Audrey Udashen led the case for the Attorney General’s Office. Statement from CHI Franciscan:
“As a non-profit, 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.”

– Cary Evans, Vice President for Communications and Government Affairs, CHI Franciscan

Additional Background
  • The settlement looks back at 2012-2017. During that time, CHI Franciscan provided $116,756,683 in direct charity care.
  • CHI Franciscan voluntarily expanded the settlement agreement to all the acute care hospitals in its health system.
  • The settlement will provide full or partial refunds to about 5,000 patients systemwide covered in the five-year period. During that time, CHI Franciscan saw about 14.5 million patient visits.
  • More information about charity care at CHI Franciscan. Multi-language video information.