SEATTLE — A Washington hospital chain will issue up to $13.4 million in refunds to patients who qualified or may have qualified for financial assistance but were billed without being notified.
Under Washington state law, patients who meet certain income requirements qualify for financial assistance with their medical bills, and it is the burden of the healthcare facility to notify them of their eligibility. Healthcare company PeaceHealth, which operates five hospitals in western Washington, is accused of violating those laws in thousands of instances.
PeaceHealth operates five hospitals in western Washington, including St. Joseph Medical Center in Bellingham, Peace Island Medical Center in Friday Harbor, St. John Medical Center in Longview, United General Medical Center in Sedro-Woolley and Southwest Medical Center in Vancouver.
An investigation by the Washington State Attorney General's Office found PeaceHealth failed to notify patients they knew likely qualified for financial assistance, and failed to screen other patients for eligibility. The investigation found PeaceHealth collected payment from over 15,000 Washington residents who qualified, or likely qualified for assistance.
PeaceHealth will pay approximately $4.2 million in direct refunds, including interest, to more than 4,500 patients. The healthcare company will begin a claims process to determine the eligibility for an additional 11,000 patients and could end up refunding an additional $9.2 million. The second group of patients will receive a form in the mail they can send back to the hospital, which will then determine if they are eligible for a refund.
The company will pay $2 million to the Washington AG's office to cover the cost of the lengthy investigation, which began in 2020, and to fund similar work in the future.
Previous charity care lawsuits brought by the AG's office
The AG's office has filed three other lawsuits against Washington healthcare companies for similar violations of charity care laws.
In February 2022, Attorney General Bob Ferguson brought a consumer protection lawsuit against five Swedish hospitals and nine Providence-affiliated healthcare facilities for failing to ensure low-income Washington residents received the discounts they were entitled to. The hospitals are accused of aggressively collecting money from patients who qualify for financial assistance. That lawsuit is going to trial in February 2024.
In a 2017 lawsuit, Ferguson secured $41 million in debt relief and $1.8 million in refunds for thousands of patients who were not offered financial assistance at eight different hospitals.
Capital Medical Center in Olympia was sued over its charity care practices in 2017. The hospital paid out $250,000 in refunds and more than $131,000 in debt relief.