Providence hospitals in Washington to forgive thousands of medical debts in charity care lawsuit

OLYMPIA – Providence Medical Group and affiliated hospitals in Washington must pay back millions of dollars to patients who were illegally and “aggressively” deceived, Attorney General Bob Ferguson announced Thursday.

A resolution filed in King County Superior Court requires the 14 Providence-affiliated hospitals in the state to refund more than $155 million in payments illegally collected from low-income patients, including $137 million to pay off illegally collected medical debt. Another $20 million will go to patients who were charged for doctor visits, despite qualifying for free or reduced-cost health care.

“Hospitals, especially nonprofits like Providence, get tax breaks and other benefits with the expectation that they’re helping everyone have access to affordable health care,” Ferguson said in a news conference Thursday. “That’s the deal. When they don’t, they’re taking advantage of the system to their benefit.”

The hospital network victimized nearly 100,000 Washington residents between 2018 and 2023, Ferguson said. The average refund payment to patients receiving direct checks is about $478. The average debt write-off for patients will be more than $900. Some Washingtonians will receive refunds or write-offs greater than $200,000.

“Providence created barriers for tens of thousands of patients who were legally entitled to financial aid with their medical bills,” Ferguson said at the news conference. “They also sent many of their most vulnerable patients to collections. One of Providence’s own employees summed it up pretty well: They called the practice ‘sending the poor to bad debt.’ ”

A spokesperson for Providence did not immediately respond via email to a request for comment. A statement about the settlement was displayed on the Providence website:

“Serving those in need, regardless of their ability to pay, is at the very heart of Providence’s Mission and values,” said Greg Hoffman, the Chief Financial Officer for Providence. “Today’s agreement reaffirms our commitment to serving those who are most vulnerable by taking steps to proactively promote the availability of financial assistance and simplify the application process. We have already begun providing payments with interest to individuals.”

Today, half of all Washingtonians are eligible for some form of financial help on their hospital bills – even if they have insurance.

The Attorney General’s office encourages residents of the state to ask about financial assistance any time they seek medical care.

In 2022, Ferguson’s office sued Providence and its Washington affiliates, Swedish Health Services, Swedish Edmonds and Kadlec Regional Medical Center. The health care system operates some of the largest hospitals in the state, including Sacred Heart Medical Center in Spokane and Providence Swedish First Hill Campus in Seattle. The legal complaint accused the nonprofit health care system of pressuring patients to pay medical bills, regardless of whether they were eligible for financial assistance under state law.

According to Washington law, all hospitals are required to provide charity care, or free or reduced-cost health care to patients who can’t afford to pay full price.

The state’s charity law also requires hospitals to inform patients about charity care verbally and in writing. Hospitals are also legally mandated to screen patients for charity care eligibility before collecting payments.

People eligible for a refund or debt write-off should get a letter in the mail from the Washington Attorney General’s Office with a check or information about a forgiven account balance.

More information about Washington’s charity law can be found at affordablehospital.wa.gov.