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House passes bill to boost Oregon hospitals’ charity care

Reports of tax-exempt hospitals hounding poor patients for payment prompted lawmakers to consider toughening Oregon’s charity care requirements
April 25, 2023

The Oregon House has overwhelmingly approved a bill intended to better protect low-income Oregonians from falling into debt for medical services that should have been free or low cost. 

State Rep. Lisa Reynolds, a Washington County Democrat and pediatrician, introduced House Bill 3320 in response to reports that Oregon’s nonprofit hospitals have skirted an existing law mandating they provide discounted or free care to uninsured patients. 

Speaking on the House floor last week, Reynolds said that 60 of Oregon’s 62 hospitals are exempt from federal, state and local taxes because of their nonprofit status. 

“In exchange for this tax-exempt status, hospitals must invest in the health of their community, including offering financial assistance to low-income patients,” said Reynolds. “It turns out most Oregon hospitals have not been keeping up their end of the bargain.”

The Oregon Legislature in 2019 established minimum levels for what hospitals must spend on patients who can’t afford medical care as well as other community benefits. 

Despite the law, reports emerged over the past year that Oregon hospitals are sidestepping its requirements. 

Service Employees International Union Local 49 in October found that hospitals used complicated processes to stymie patients from accessing financial aid. The New York Times in September reported that nonprofit hospitals in Oregon were aggressively pursuing debts against poor patients. The Oregon Health Authority in January concluded that “not all hospitals are appropriately screening patients for eligibility for financial assistance.”

Washington state Attorney General Bob Ferguson is suing Providence Health and Services and Oregon Attorney General Ellen Rosenblum has also opened an investigation.

“We know that medical debt is now the most common reason for bankruptcy filings,” Reynolds said. “Making these families more vulnerable in terms of housing, security, and more. This lack of compliance from hospitals has immediate and often devastating consequences for patients who should automatically receive financial assistance.”

Individual hospitals and the Oregon Association of Hospitals and Health Systems have disputed reports that they’ve avoided financial aid requirements. While the hospital trade group opposed an earlier version of the bill, it now supports it. “We look forward to continued discussions to improve the bill for both patients and hospitals,” said Lisa Goodman, the group's vice president for communications.

H.B. 3320 requires nonprofit hospitals to screen patients for eligibility if they are uninsured or owe more than $500. It also directs nonprofit hospitals to have a clear appeals process and requires them to refund payments to patients who have later been deemed eligible for assistance.

The bill passed out of the House on a 54-4 vote. It has been referred to the Senate Health Care Committee.  

Speaking before the vote, state Rep. Christine Goodwin, R-Canyonville, said she normally opposed government regulation of private business but said the bill was needed to ensure “a fair and consistent health care system and will significantly alleviate the pressure placed on families” after getting medical care. 

“This legislation is the least we can do to safeguard the coverage of Oregonians as they seek healing,” she said. 

You can reach Jake at [email protected] or via Twitter @jakethomas2009.