Washington’s PeaceHealth settles a $4 million reimbursement to 4,000 patients, resolving a failure to disclose charity care policies. Allegations of violations led by the State Attorney General sparked this resolution, addressing breaches of the Charity Care Act. The health system’s failure to screen patients for eligibility before seeking payments triggered concerns. Despite cooperative efforts in the investigation and commitments to improve, questions linger about non-profit health systems’ compliance with charity care mandates.
Washington’s PeaceHealth, a Washington-based non-profit health system, recently reached a $4 million reimbursement settlement affecting 4,000 patients. This agreement stems from the State of Washington’s complaint, citing PeaceHealth’s failure to disclose charity care policies. Violations of the Washington Consumer Protection Act and the Charity Care Act spotlighted concerns about patient screening before payment collection. This development underscores broader discussions about the accountability of non-profit health systems in fulfilling charity care obligations.
In a recent development, PeaceHealth, a Washington-based non-profit health system, has agreed to disburse $4 million to 4,000 patients following a failure to disclose charity care policies before collecting payments. This settlement, arising from a complaint filed by the State of Washington, addresses concerns regarding PeaceHealth’s violation of the Washington Consumer Protection Act and the Charity Care Act. These acts mandate Washington hospitals to offer free or reduced-cost care to low-income patients.
The Charity Care Act underwent an update on July 1, 2022, broadening the household income eligibility for charity care from 200 percent to 400 percent of the federal poverty level (FPL).
According to regulations, hospitals must diligently assess a patient’s insurance status, family income, and charity care eligibility before pursuing any payment collections. Allegedly, PeaceHealth attempted to collect pre-service deposits and estimates for procedures without initially screening patients for charity care eligibility. Furthermore, the health system purportedly pursued payments during registration without confirming eligibility.
Utilizing predictive analytics since 2018, PeaceHealth employed publicly available data to identify patients likely eligible for charity care. Despite this, the health system allegedly billed these qualifying patients repeatedly, collected payments amounting to millions of dollars, and made collection calls without disclosing their probable eligibility. Although charity care was eventually extended after the fourth bill, no reimbursements were provided for partial payments, and patients were not notified of their eligibility status.
In response to these allegations, PeaceHealth conveyed cooperation with the Attorney General’s investigation, providing documents to demonstrate compliance with the law and informing patients about available financial assistance. Additionally, the health system assured continued financial aid for patients struggling with payments beyond charity care eligibility thresholds.
As part of the settlement, PeaceHealth committed to reimbursing $4 million to approximately 4,000 patients who hadn’t applied for assistance or responded to outreach efforts. Notably, this amount accounts for less than 1.6 percent of the $258 million in charity care disbursed by PeaceHealth since 2018.
Furthermore, PeaceHealth pledged to enhance its patient screening processes for financial assistance during hospital-based services by incorporating inquiries about household income and size at registration. Irrespective of patients’ responses, the health system will furnish information about financial aid and application procedures.
In addition to the reimbursement, PeaceHealth will cover $2 million in costs and attorney fees and notify other eligible patients who might claim similar reimbursements for prior payments.
Tom Karnes, PeaceHealth’s general counsel, expressed the organization’s dedication to identifying individuals who qualify for charity care, emphasizing their commitment to aiding vulnerable community members. He highlighted the decision to settle as a means to uphold their healing mission and health justice commitment, foregoing extensive litigation.
The status of non-profit health systems has faced scrutiny, with questions raised regarding their provision of charity care compared to the benefits received from tax exemptions. Reports, such as one from the Lown Institute, have indicated that non-profit hospitals received more in tax breaks than they allocated to charity care in 2020. In contrast, the American Hospital Association (AHA) contends that non-profit hospitals consistently deliver substantial charity care to their patients.
This agreement with PeaceHealth signifies a step towards rectifying past discrepancies and a commitment to transparent, fair healthcare practices while addressing the evolving landscape of charity care provision in non-profit health systems.
PeaceHealth’s $4 million settlement reflects an attempt to rectify lapses in charity care disclosure and patient screening. Despite cooperation with investigations and commitments to enhance procedures, questions persist regarding non-profit health systems’ charity care delivery. This resolution highlights evolving standards and the need for transparent, accountable healthcare practices. The scrutiny of such settlements underscores the ongoing debate about the proportionality of tax exemptions versus charity care provisions by non-profit health systems, signaling an ongoing necessity for improved oversight and compliance.