Washington hospital sued for allegedly withholding charity care

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St. Joseph Medical Center in Tacoma, Washington, has been sued by the state’s attorney general for allegedly instructing employees not to mention the availability of charity care to patients, even when they were “obviously low-income or homeless.”

According to Washington Attorney General Bob Ferguson, former St. Joseph employees reported being told by their supervisors to only provide applications for charity care when a patient specifically asked for one and to first “aggressively seek payment.” One employee said she was trained to tell patients they could only be given a charity care application if they first paid a deposit of $250 or more, violating the state requirement to screen patients for charity care eligibility before asking for payment.

“St. Joseph unlawfully put obstacles in the way of tens of thousands of patients seeking access to affordable health care,” Ferguson said in a statement. “As Attorney General, I’m committed to fighting for access to affordable care for all Washingtonians.”

Of the three requirements for charity care in Washington state law—screening for eligibility, notifying patients of charity care and only requiring one income-related document to prove eligibility—Ferguson said St. Joseph violated all of them.

According to the lawsuit, senior management at the hospital, including its CFO, were aware of the issues but didn’t take action. The policy even affected hospital employees, with one complaining she was served with a debt collection notice while the hospital claimed her charity care application was being processed.

Because of these practices, the hospital paid as much as 40 percent below the regional average for charity care, according to Ferguson, amounting to about $70 million over a four-year period. The state could fine the hospital up to $2,000 per individual violation, of which there may be tens of thousands, according to the suit.

CHI Franciscan, which runs St. Joseph, didn’t directly address the allegations in its response to the lawsuit, but did claim it exceeds the state’s charity care standards by covering costs for patients with incomes lower than 300 percent of the federal poverty level, which it said was triple the income level required by state law.

“As a nonprofit charitable organization, we are committed to providing the highest quality care to everyone who needs it,” Cary Evans, CHI Franciscan’s vice president of communications and government affairs, said in a statement. “We carefully consider all charity-care applications we receive and approve all who qualify.”

Other nonprofit hospitals have been accused of violating charity care standards in recent months. Two Spokane, Wash. hospitals owned by Community Health Systems have been sued for allegedly trying “to drive indigent patients away.” Charity care requirements were also the reason for an unnamed hospitals being stripped of its nonprofit status for the first time.