PeaceHealth to refund patients after reaching charity care settlement

PeaceHealth will pay up to $13.4 million to more than 15,000 low-income patients of its five Western Washington hospitals as part of an agreement with the state attorney general regarding charity care.

Attorney General Bob Ferguson and the Vancouver, Wash.-based health system announced the settlement Nov. 20 after Mr. Ferguson's office investigated PeaceHealth's financial assistance and collection practices. A news release from Mr. Ferguson's office said the investigation, which launched in 2020, found that the health system billed thousands of low-income patients who likely were eligible for financial assistance without informing them that they qualified.

PeaceHealth, in a separate news release shared with Becker's, said it cooperated with the probe by providing tens of thousands of documents and supplying evidence that it did everything required by law — and more — to inform its patients about the availability of financial assistance.

"PeaceHealth is committed to identifying every single person who can benefit from charity care," PeaceHealth general counsel Tom Karnes said in the release. "We welcome this opportunity to continue to lead the way in charity care, providing physical and financial healing to the most vulnerable in our communities."

Mr. Ferguson said: "I appreciate PeaceHealth's cooperation in reaching this resolution that fully refunds Washingtonians for millions of dollars in medical payments, plus interest, without the need for litigation. Washington's hospital financial assistance law helps working families avoid crushing medical debt by making help available to those who qualify."

PeaceHealth said it has awarded $258 million in charity care to 66,338 patients since 2018 — including $83 million to 25,000 patients without income verification. According to a consent decree, filed Nov. 20 in Whatcom County Superior Court, PeaceHealth will pay approximately $4.2 million in direct refunds — including more than $400,000 in interest — to reimburse approximately 4,000 patients who the health system said did not apply for assistance or respond to outreach. 

Mr. Ferguson's office said this represents full restitution, plus interest, for affected patients at PeaceHealth hospitals in Bellingham, Friday Harbor, Longview, Sedro-Woolley and Vancouver. The average payment to these individuals will be more than $900. Eight people will receive more than $10,000. Nearly 50 will see refunds of more than $5,000. 

Mr. Ferguson's office said PeaceHealth is also required to refund up to an additional $9.2 million — including more than $900,000 interest — through a claims process to approximately 11,000 patients "who were also likely eligible for help on their medical bills. If they file claims, these 11,000 patients will receive full restitution plus interest. Qualifying patients will receive a letter from the attorney general's office informing them of the resolution and refund process."

PeaceHealth said patients are eligible for receiving free or discounted care if they earn 400% of the federal poverty level and that it supported a 2020 change to state law making more patients eligible for assistance.

"PeaceHealth's mission is healing, not profit. Our programs have a demonstrated record of providing industry-leading free or discounted care to those in need — not maximizing collections," Chief Financial and Growth Officer Darrin Montalvo said in the health system's release. "Regardless of their financial circumstances, each patient who comes to us seeking care is experiencing a vulnerable moment in their life and needs healing. We hold each healing opportunity as sacred, so our commitment to financial healing closely aligns with our mission."

PeaceHealth said it will build on its previous charity care efforts by enhancing how it screens patients for financial assistance for hospital-based services. It also said that, in addition to the patient refunds, it will pay $2 million to Mr. Ferguson's office in costs and attorney fees.

Mr. Karnes added, "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."

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