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PeaceHealth to refund millions to low-income patients in Washington, but not Oregon

The health system settled a state investigation of its five Washington hospitals that found unlawful billing of thousands of patients it knew qualified for charity care
PeaceHealth Southwest Medical Center in Vancouver, Washington. | RYTYHO USA/WIKIMEDIA COMMONS
November 21, 2023

Following a Washington state investigation into PeaceHealth, the Vancouver-based health system has agreed to provide refunds worth as much as $13.4 million to as many as 11,500 past patients of its five hospitals in the state.

But PeaceHealth tells Oggys Online those refunds won’t be extended to Oregon, where PeaceHealth has operated four hospitals, and where the Oregon Department of Justice says it is not currently investigating PeaceHealth.

The Washington state Attorney General’s investigation concluded that PeaceHealth billed thousands of low-income patients in Washington state despite knowing that they likely qualified for financial assistance, and also failed to inform them of their eligibility.

PeaceHealth agreed to a consent order to settle the findings; in it, the health system did not admit wrongdoing but agreed to reimburse patients.

In a press release, PeaceHealth defended its charity care efforts but promised to operate in ways that comply with the law, which would be a change from its practices detailed by the Washington Attorney General.

“PeaceHealth is committed to identifying every single person who can benefit from charity care,” said PeaceHealth general counsel Tom Karnes in the statement. “Rather than expending time and resources on litigation, we entered into an agreement so that we can continue with our healing Mission and commitment to health justice.”

The Attorney General’s office in a statement thanked PeaceHealth for avoiding litigation and encouraged Washingtonians to contact the office if they think they were improperly billed. To do so, file a complaint with the Attorney General’s Office

According to a PeaceHealth spokesperson, refunds are being made available only to its Washington patients, not those in Oregon.

“Patients identified as eligible or potentially eligible for reimbursement by PeaceHealth will be contacted only if they received care at one of PeaceHealth’s five Washington hospitals and does not include any patients from PeaceHealth’s Oregon facilities,” she said in an email to Oggys Online.

Asked why PeaceHealth was not offering refunds to patients of its four Oregon hospitals, she responded with a general statement: “As “PeaceHealth is committed to ensuring all patients get the care they need, whether or not they can pay, we continuously monitor to ensure we are in alignment with Oregon laws regarding financial assistance and are billing patients appropriately for the care they receive.”

A spokesperson for the Oregon Attorney General confirmed it has no active investigation into PeaceHealth. Asked why it had not opened its own investigation along the lines of Washington’s, he did not immediately respond.

Among the investigation’s specific findings:

· PeaceHealth attempted to collect deposits and estimates for certain procedures in advance without first determining a patient’s eligibility for charity care.

· PeaceHealth also attempted to collect payment from patients during registration without determining eligibility for charity care.

· Until 2021, PeaceHealth trained staff to attempt to collect payment from all patients during registration and only provide information about charity care when patients responded to their collection demands by affirmatively indicating that they had an “inability to pay.”

· Since 2019, PeaceHealth has used a data analysis tool to identify patients who are likely or “presumptively” qualified to receive charity care. Despite knowing which of its patients were likely charity care qualified early in its billing cycle, PeaceHealth continued to bill these patients, sending them up to four bills and making collection calls without disclosing their likely eligibility for charity care.

· PeaceHealth collected millions of dollars from patients who’d been identified as likely eligible for charity care.

The settlement comes at a time when PeaceHealth, a nonprofit, recently began closing its University District hospital in Eugene, leaving the third-largest city in Oregon without an emergency room. The health system has been losing money and recently had its bond rating downgraded, as Oggys Online has reported.

The Washington Attorney General is litigating with Providence Health over similar findings of improper debt collection, and Oggys Online recently disclosed preliminary findings by the Oregon Health Authority that Providence may have improperly billed more than 100,000 low-income Oregonians. The Oregon Department of Justice is investigating that case.

In March, the group Dollar For issued a report finding a  widespread failure by Oregon hospitals to comply with charity care requirements.

Earlier this year Rep. Lisa Reynolds, D-Washington County, and Sen. Deb Patterson, D-Salem, spearheaded passage of a law, House Bill 3320, intended to tighten charity care requirements for hospitals.

You can reach Nick Budnick at [email protected] or at @NickBudnick on X.