Medical debts erased for 17,000 former Deaconess, Valley patients

Notices are being mailed to about 17,000 former patients of Deaconess and Valley hospitals who have had medical debts erased as part of a major legal settlement.

Tennessee-based Community Health Systems, which owned the Spokane-area hospitals from 2008 to 2017, reached the settlement with the Empire Health Foundation in October after more than two years of litigation.

Empire alleged that CHS failed to provide levels of charity care – free or discounted treatment for low-income patients – that the for-profit company had promised when buying the hospitals. The foundation formed when the former Empire Health Services sold the hospitals to CHS in 2008.

CHS agreed to forgive up to $50 million in debt, and Empire officials initially estimated the number of people affected would be between 5,000 and 15,000. Many patients had multiple accounts because they made multiple visits to the hospitals during the 10-year period when CHS owned the facilities.

After combing through about 27,000 accounts, CHS found about 17,000 former patients who are eligible for debt relief under the settlement. A total of $47.5 million in debt is being forgiven, said Rebecca Ayer, the company’s vice president for corporate communications.

On average, those benefiting from the settlement will have roughly $2,800 in debt wiped from their credit reports.

The debt relief is automatic. Those affected should receive notices in the mail by Nov. 30 and will not need to take any action to discharge their debts. Former patients who receive letters can call (844) 787-8822 for a free legal consultation provided by the Northwest Justice Project.

Empire’s attorneys also have set up a website with information about the settlement: symslaw.com/empire-chs-settlement

CHS did not admit liability in the settlement agreement and has continued to deny the allegations brought by Empire.

A federal judge, however, concluded in July that the company had breached its purchasing contract and violated Washington’s Charity Care Act by asking poor patients to pay deposits before determining whether they were eligible for charity care.

As part of the settlement, CHS also agreed to pay $2 million for Empire’s legal expenses, plus $20 million that the Spokane-based foundation is using to create a political lobbying arm, the Empire Health Community Advocacy Fund.

Deaconess and Valley are now owned by MultiCare Health System, a Tacoma-based nonprofit that was not involved in the litigation.