Hospitals in Washington are legally required to provide free charity care for patients with incomes below the poverty level. Even middle-income patients, in some cases, are entitled to breaks in their hospital bills. But advocates for patients contend that too often, eligible patients are denied charity care or not told that it's available.

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When Barbara Gamba went to Valley Medical Center in May 2007 with a gallbladder attack, she told everyone within earshot that she had no job and no health insurance.

A Valley Medical financial counselor told the Renton woman at the time not to worry; if she couldn’t pay for her treatment, the hospital would chalk it up as charity care.

But it didn’t do that.

A month later, Gamba received a statement for the full cost of her gallbladder surgery: $18,410. She immediately sent the Renton hospital a letter explaining that she was broke, and again requested a charity write-off. Valley Medical then knocked off 30 percent — or $5,469 — from her bill but insisted she pay the rest.

“Had I known that I’d owe this amount, I would have kept my gallbladder and gone home,” Gamba, now employed as a counselor for Senior Services, wrote back. “I am begging for your compassion.”

Gamba shouldn’t have had to beg.

Under Washington law, Gamba and other patients with annual incomes below the poverty level — $10,400 for a single person — are not required to pay anything at any licensed medical or psychiatric hospital in the state. What’s more, the hospitals have signed binding, if voluntary, pledges to grant discounts, in some cases even to middle-income patients.

The problem, according to advocates and attorneys for patients, is that people entitled to free care don’t always get it. Some patients say they never were told about the charity-care option, or that they quickly forgot it in the haze of hospitalization.

The complaints come at a time of renewed scrutiny over whether nonprofit hospitals are providing enough charity care to justify their tax breaks. While Washington’s 45 nonprofit hospitals saved $47 million in property taxes in 2006, a joint legislative committee issued a report last year concluding that nonprofits were no more likely than their for-profit counterparts to grant charity care.

In Congress, Sen. Chuck Grassley, R-Iowa, has been aiming to impose minimum charity-care levels on tax-exempt hospitals. In Olympia, a state bill that would have increased charity-care standards died in 2005.

Two years later, members of the Washington State Hospital Association offered a fix: For patients earning up to twice the poverty level, the hospitals offered to voluntarily cap charges at the hospitals’ actual costs, which can be half of the billed charges. Patients earning between two and three times the poverty level would have to pay only 30 percent above cost.

Some miss out

Despite the widely publicized pledge, Matt Geyman, a civil-litigation attorney with Phillips Law Group in Seattle, said some poor patients never realize — or simply aren’t told — that they shouldn’t have to pay.

“It’s not at all uncommon for hospitals to send bills to collection agencies without the patients ever knowing about charity care,” said Geyman, who frequently does pro bono work for patients.

Hospitals are required to alert the state Department of Health whenever they reject a charity-care applicant for the second time. But the state has received only a handful of such notifications, and acknowledges that ensuring compliance with charity-care rules is largely up to the hospitals themselves.

Earlier this month, Geyman filed suit against a collection agency working for Seattle’s Northwest Hospital on behalf of an uninsured patient who was sued for nonpayment of a $3,000 bill. The woman told the bill collector that she couldn’t afford to pay and asked for debt relief but was told it was too late.

Washington’s statute does not set a time limit on when an eligible patient can seek charity care. Geyman said he believes many patients have been similarly misinformed and is seeking to have his suit declared a class-action case.

“But the problem is that in 99 percent of the cases, the patients don’t get lawyers and they don’t know about their rights,” Geyman said.

Bob Steigmeyer, Northwest’s chief financial officer, said his hospital has no reason to deny charity care to those who qualify. In 2007, Northwest provided $3.8 million in charity care, including free care for those earning up to twice the poverty level. It wrote off an additional $9.7 million in bad debts from patients who simply didn’t pay their bills.

“We try to be the patients’ advocate in all channels for financial [help],” Steigmeyer said. Even so, he said, “we live in an industry where margins are thin to begin with,” and the hospital must balance its charitable mission against financial prudence.

Narrow rules

While hospitals are legally bound to provide charity care, doctors practicing independently inside hospitals are not. And although hospitals must treat any person needing emergency care regardless of ability to pay, they are not so required in nonurgent cases.

But hospitals are free to offer more-generous help — and many do.

For instance, in cases of “severe hardship,” the University of Washington Medical Center and Harborview Medical Center both will write off some charges for patients whose income exceeds the hospitals’ charity-care cutoffs.

Swedish Medical Center, on the other hand, has a more specific policy, saying “catastrophic” charity care is available whenever a patient’s hospital charges equal 10 percent of his annual income.

Results may vary

The seemingly random policies mean that sudden illnesses can leave uninsured patients impoverished at some hospitals but not at others.

When Theo Kostelecky, of Duvall, drove himself to Kirkland’s Evergreen Hospital Medical Center in what turned out to be the throes of a heart attack, he also walked into financial devastation.

Kostelecky earns more than $40,000 a year as a live-in caretaker for a wealthy Seattle couple who do not provide insurance coverage. His income is twice Evergreen’s limit for charity care.

Kostelecky’s three-day stay at Evergreen in March totaled $56,000. He frantically sought help from the hospital but was turned down, despite the fact that Evergreen’s policy gives it discretion to waive income limits in dire circumstances.

Driving just seven miles farther could have prevented much of Kostelecky’s ordeal. Overlake Hospital Medical Center in Bellevue provides “catastrophic charity” based not only on income but on the size of a bill. For Kostelecky, that could have erased 80 percent of the charges.

Chrissy Yamada, Evergreen’s chief financial officer, said she sympathizes with Kostelecky’s plight. Evergreen expects to provide about $4.5 million in charity care this year, and anticipates that number spiking significantly in 2009.

Granting charity care to Kostelecky “would come at the expense of other things at the hospital,” Yamada said.

Financial destruction

Kostelecky, 59, is preparing to file for his second medical-related bankruptcy in three years. He fears that the bankruptcy will financially cripple him and his longtime partner, Peter Haviland.

“If this goes through, I will be destroyed for life,” Kostelecky said.

Gamba, the gallbladder patient, understands that desperation.

When Gamba failed to convince Valley Medical that she was indigent, she turned to Solid Ground, a poverty-action group, which eventually connected her with Geyman, the attorney. It took a letter from Geyman — and, according to Valley Medical, belated proof of Gamba’s lack of income — for the hospital to grant her full charity care last December.

Gamba, 60, then fainted and fell on a table while visiting Bremerton six months later. She was rushed to the emergency room at Harrison Hospital, where doctors found nothing wrong. At the time, Gamba was working half time for the city of Seattle for less than $10 an hour, with no benefits.

She now owes Harrison Hospital $4,236 — a bill she says she can’t pay — and is preparing to file for bankruptcy.

Kyung Song: 206-464-2423 or ksong@seattletimes.com