Washington Sues Swedish, Providence Hospitals Over Collections

SEATTLE — Washington has filed a suit against five Swedish hospitals and nine Providence affiliates, alleging that they aggressively collected payments from thousands of low-income Washingtonians who should've been eligible for charity care.

According to the suit, filed Thursday in King County Superior Court, the hospitals sent collections notices to over 50,000 Washingtonians who were low-income, and legally entitled to charity care, committing thousands of Consumer Protection Act violations in the process.

As the Attorney General's Office (AGO) explains, Washington charity care law means lower income residents do not have to pay out-of-pocket hospital costs, whether they're insured or not. Despite that, the suit alleges, Swedish hospitals trained their employees to "aggressively collect payment without regard for a patient’s eligibility for financial assistance", telling employees “don’t accept the first no."

Attorney General Bob Ferguson and his team discovered the issue after receiving several complaints from patients who felt they had been over-charged.

"Ferguson’s lawsuit asserts that Providence, Swedish and Kadlec developed and encouraged a corporate culture that prioritizes collection over charity care, aggressively attempting to collect payment at the time of treatment and continuing to collect post-treatment even when the hospitals know that a patient is eligible for financial assistance," the AGO said in a news release. "The Attorney General’s Office investigation revealed that the hospitals train employees to ask for payment in a way that implies that payment is expected, while obscuring a patient’s right to apply for charity care."

Since 2018, the hospitals have sent 54,000 patient accounts to debt collection, even though those patients were eligible for financial assistance. Combined, the 54,000 patients accrued a debt of more than $70 million that they should've been able to write off.

“Charity care helps low-income families avoid crushing medical debt by making financial assistance available to those who qualify,” Ferguson said. “Hospitals cannot deceive Washingtonians about their legal right to access medical financial assistance. They must follow the law, and ensure low-income patients have access to the resources they need.”

The suit alleges the illegal collections took place at Swedish Health Services' hospitals in Seattle, Issaquah and Edmonds, as well as Providence Health & Services Washington’s non-profits in Spokane, Everett, Olympia, Chentralia, Chewelah, Colville, and Walla Walla. The suit asks that the hospitals stop these collection tactics immediately and offer refunds, plus interest, to the thousands of patients who paid for care when they should've received financial assistance. It also seeks debt relief or forgiveness for patients who still owe money.