Washington state's attorney general has filed suit against Providence, alleging that 14 of its hospitals engaged in aggressive tactics to collect payment, failed to ensure discounts for eligible low-income patients, and steered poor patients to debt collectors.
Attorney General Bob Ferguson's consumer protection lawsuit claims that Providence began an effort with assistance from McKinsey in 2018, called RevUp, to substantially increase the amount of payments collected directly from patients. Staff who interact with patients were directed to attempt collecting payment on hospital bills in every interaction with a motto of "Ask Every Patient Every Time," the lawsuit states.
The attorney general alleges that Providence trained staff to collect payment with tactics that did not make the availability of charity care known, including specific phrasing to patients such as, "How would you like to pay today?"
"It is clear that Providence specifically selected this phrasing to eliminate any notion that patients could delay, avoid or defer payment or seek charity care to which the patient is entitled," the lawsuit alleges.
The lawsuit mentions an employee who allegedly dressed in costume for Halloween 2018 as "RevUp Ricky," and managers in the system's revenue cycle department allegedly forwarded photos of the employee to associates. The attorney general claims this as a sign of "the extent to which the RevUp ethos permeated Providence's corporate culture."
The lawsuit also claims that Providence knowingly sent upward of 46,783 patients who qualified for charity care or were enrolled in Medicaid to debt collectors.
"Providence's acts and practices exploit the power and knowledge imbalance between Providence and its patients for its own financial gain," the lawsuit contends. "While Providence is fully aware of its charity care obligations to patients, many of its low-income patients are not."
Providence expressed discontent and disagreement with the attorney general's charges.
"The Providence family of organizations is extremely disappointed that the Office of the Washington State Attorney General has chosen to file inaccurate and unfair charges against us regarding our charity care and financial assistance practices," a Providence spokesperson shared with Becker's. "Serving every person who comes to us, regardless of ability to pay, is a central tenet of our mission as a not-for-profit organization. We take this responsibility seriously."
"We look forward to defending ourselves in court. In the meantime, because this is pending litigation, we are not commenting further at this time," the spokesperson shared in a statement.
The lawsuit seeks restitution in the form of full write-off of medical debts and refunds, plus interest, for patients who allegedly did not receive financial assistance. In addition to the $70 million in debt relief and refunds, the attorney general is seeking millions of dollars in civil penalties, noting that the number of alleged Consumer Protection Act violations will be determined as the case progresses.
All hospitals named in the 31-page lawsuit are part of or affiliated with Renton, Wash.-based Providence. They are:
- Providence Centralia Hospital
- Providence St. Joseph Hospital
- Providence Mount Carmel Hospital
- Providence Regional Medical Center
- Providence St. Peter Hospital
- Providence Holy Family Hospital
- Providence Sacred Heart Medical Center
- Providence St. Mary Medical Center
- Swedish First Hill Campus
- Swedish Cherry Hill Campus
- Swedish Ballard Campus
- Swedish Issaquah Campus
- Swedish Edmonds Campus
- Kadlec Regional Medical Center