CHI Franciscan to pay millions to settle claims it denied financial help to qualified patients

In a case that drew headlines in 2017, the state Monday announced an agreement reached with CHI Franciscan in a case involving the medical system’s charity-care practices.

Attorney General Bob Ferguson’s office said Monday that CHI Franciscan would “forgive as much as $20 million in debt, pay $2.22 million in refunds, pay the Attorney General’s Office $2.46 million and rehabilitate the credit of thousands of patients who qualified for charity care between 2012 and 2017 but did not receive it.”

The agreement includes CHI Franciscan reforming charity-care practices at all of its acute-care hospitals, resulting in restitution for patients withheld charity care in its system.

In addition to St. Joseph in Tacoma, sites included in the agreement include St. Elizabeth Hospital in Enumclaw, St. Francis Hospital in Federal Way, St. Anthony Hospital in Gig Harbor, St. Clare Hospital in Lakewood, Harrison Medical Center (Bremerton and Silverdale) and Highline Medical Center in Burien.

In a statement Monday, Cary Evans, vice president for Communications and Government Affairs, CHI Franciscan, said: “As a nonprofit, 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.

Evans noted “in 2018 alone” CHI provided $25 million in charity care.

“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.”

Ferguson sued St. Joseph Medical Center in 2017, initially alleging St. Joseph withheld charity care from tens of thousands of patients since 2012.

On Monday, the Attorney General’s Office said that so far “at least 5,451 patients have been identified who will receive automatic refunds totaling $2.22 million.”

“Medical debt is one of the leading reasons why families get trapped in poverty,” Ferguson said in a statement Monday. “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. Today’s resolution rights a wrong committed against thousands of patients across Washington.”

Additionally, he said, “The Attorney General’s Office anticipates that several thousand patients will receive automatic debt relief, totaling as much as $20 million.”

According to the AG’s office: “The resolution requires a multi-faceted strategy to ensure any Washingtonian who qualified for charity care but did not receive it will get the relief they deserve. Every patient from January 2012 to December 2017 will have the opportunity to receive debt forgiveness or refunds if they qualified for charity care, whether they had insurance or not.”

The lawsuit alleged St. Joseph violated the state’s requirements for charity care, which includes providing notice of the availability verbally and in writing, eligibility screening before attempting payment collection and requiring patients to provide only one income-related document to prove eligibility.

“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 AG’s office said Monday in its release. “The hospital also required patients to provide several forms of income documentation to show they were eligible to receive assistance.”

The attorney general’s office said a company contracted by St. Joseph for revenue management “trained staff to use language designed to give patients the impression that they were required to pay for their care upfront.”

The AG’s office said another complaint came from one of St. Joseph’s employees, who was allegedly assured that her accounts were on hold during the charity-care application process, only later to be served with a debt-collection lawsuit over the accounts.

The office further stated in its release that, “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.”

The lawsuit marked the first time the state Attorney General’s Office had filed a consumer-protection lawsuit regarding deceptive and unfair practices tied to charity care. At a news conference Monday, Ferguson said it was a first of its kind resolution.

“Today’s the culmination of a lot of hard work,” Ferguson said.

At the time of the initial filing in 2017, CHI Franciscan, through Evans, said it was “disappointed” by the lawsuit and noted that it covered the cost of care for those whose income is lower than 300 percent of the federal poverty level, “triple the income level required by state law,” a policy still in place, according to CHI Franciscan’s website.

State law requires making charity care available to those who are at or below 200 percent of the federal poverty level.

The medical system contends that during the 2012-2017 period, it provided $116,756,683 in direct charity care and saw about 14.5 million patient visits. It also maintains it voluntary expanded the settlement to include its other acute-care hospitals as part of the agreement.

Sorting it all out

A third-party review is now looking at who gets what in the settlement.

Affected patients “will automatically receive a notice in the mail,” said Ferguson, “which will include instructions on how to receive refunds, debt relief or both if they were eligible at the time they received care.”

The outreach includes information on St. Joseph’s website and social media accounts and on-site in public areas at the hospital, along with charity-care information.

Community meetings also will occur through Project Access of Pierce County, Lutheran Community Services, Aging and Disability Resources, South Sound Outreach and the Tacoma Urban League. According to the agreement, Spanish-language media outlets also will be used to help get the word out.

Credit bureaus also will be notified to help repair patients’ accounts, and credit-reporting bureaus will be notified by CHI Franciscan that affected accounts are paid in full and request that the bureaus eliminate any delinquent bill listings in these cases.

According to the AG office’s instructions, those who believe they qualified for charity care when they received medical care should call CHI Franciscan at 888-779-6380 to 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,” the office said in its release.

The state also encourages patients to check their credit reports to make sure applicable changes are reflected in their credit reports, and if not, to contact the Attorney General’s Office at www.atg.wa.gov/file-complaint or call 800-551-4636.

Rep. Laurie Jinkins, D-Tacoma, also spoke at Monday’s news conference. Her office heard constituents’ complaints about the medical system’s issues, and she made note legislation related to medical-debt collection practices is headed to the governor’s desk.

“I remember our press conference when this started, “ Jinkins said, “and you said that you were worried that St Joseph’s had lost their way and I shared that worry.

“I’m hoping this is something that will take them back to their mission and help them find their way back. This gives them the opportunity to do it, and I hope that that’s what we’ll see.”

CHI Franciscan Charity Care

Online information: https://bit.ly/2ZIlBRD

Videos (English, subtitled and multilingual): https://www.chifranciscan.org/charity-care