Providence hospitals continue to face criticism over the health system’s debt collection practices, more than six months after being sued by the state’s attorney general for allegedly failing to provide millions of dollars worth of free or discounted medical care to low-income patients.
In a Wednesday evening letter that U.S. Sen. Patty Murray sent to Rod Hochman, CEO of Providence St. Joseph Health, she asked detailed questions about the number of low-income Providence patients who were pressured to pay their full hospital bills, what the hospital’s debt collection policies are and how employees are trained to talk about debt collection, among other inquiries.
“It’s unacceptable to me that anyone who is struggling would go to a nonprofit hospital only to be aggressively pursued to pay for care that should’ve been free in the first place,” Murray, the chair of the U.S. Senate Committee on Health, Education, Labor and Pensions, said in a statement Thursday morning. “These are patients, not profit opportunities. They should be treated, not taken advantage of.”
In the letter, Murray reiterated the state’s charity care law, which was established in 1989 and requires hospitals to offer free or reduced-cost medical care to those who can’t afford the full amount — something Providence has been accused of failing to do.
Instead, the hospital system has allegedly trained its employees to use “collection tactics” that create the impression that all patients must pay for care regardless of income level, according to state Attorney General Bob Ferguson’s lawsuit against Providence.
One tactic gives staffers a script to follow and instructs them to “ask every patient every time” to pay their hospital bills, the complaint says, referencing Providence’s training materials. Another training guideline directs staff to try at least three times to collect payment after the “first no” — and then only give information on charity care after that.
Providence has denied all allegations. According to a statement Thursday from Providence spokesperson Melissa Tizon, hospital leaders had reached out to Murray’s office in February, when Ferguson’s office filed the initial complaint, to offer to walk her through the concerns, but didn’t receive a response.
The hospital remains “more than happy” to answer Murray’s questions, the statement said. In addition, Providence said those particular training materials “were not used broadly” as far as administrators understand and that they “are not used today.”
“The notion that Providence intentionally takes advantage of those who are vulnerable could not be further from the truth of who we are,” the hospital said in a direct response to a New York Times article on the topic this week. “Providence proactively communicates the availability of financial assistance in numerous ways and strives to engage with patients early to determine the need for assistance. However, it is not always possible to have these conversations in the moment given the urgency of some medical situations.”
The hospital added that if patients “do not respond to tell us they need financial help, we proceed with the normal billing process. … When patients do respond, we work with them to get them approved for assistance and adjust their balance accordingly.”
In an internal message to Providence employees, chief financial officer Greg Hoffman also wrote, “The allegations [in The New York Times story] were shocking and upsetting. … The crux of the Times’ allegations is that we intentionally changed our policy to send those who were eligible for charity care to collections. That is categorically untrue.”
An “unintended error” occurred when the hospital shifted from a manual process to an automated one, causing some Medicaid patients to receive collection notices, he said. Further details about the error or how many people were affected were unclear.
Under a previous form of the charity care law, Washingtonians within 200% of the federal poverty level were eligible for financial assistance, which is up to about $27,200 in annual income for a one-person household.
The law was updated July 1, ensuring all Washingtonians within 300% of the federal poverty level qualify for charity care for their full out-of-pocket hospital bill, as long as care is considered “medically necessary.”
Murray’s letter noted that many of Providence’s alleged practices to pressure low-income patients “begun or escalated” in 2018, when the hospital hired consulting firm McKinsey & Company to design and develop Rev-Up, the training program that instructed employees not to accept the “first no,” The New York Times reported.
According to the suit, Providence paid McKinsey $45 million in 2019 for its consulting work, which included but isn’t limited to, the training materials, the hospital said in the statement.
Before the Rev-Up program kicked in, Providence spent 1.24% of its expenses on charity care, below the nationwide average of 2% for nonprofit hospitals, The New York Times reported.
Ferguson also alleged Providence had sent more than 54,000 patient accounts to a third-party debt collection agency even though the hospital knew the patients were eligible for financial assistance. The accounts totaled more than $70 million.
In August, Ferguson’s office added two debt collection agencies, Optimum Outcomes and Harris & Harris, to the lawsuit. According to the updated complaint, both agencies “failed to include mandatory written disclosures informing patients of the availability of charity care.”
“Collection agencies cannot deceive Washingtonians about their legal right to access medical financial assistance,” Ferguson said in a statement at the time.
Murray asked Providence to send a response to her office by Oct. 12.