Another Oregon system sued over charity care

St. Charles Health System, a private nonprofit system in Bend, Ore., has been named in a lawsuit after allegedly denying charity care to eligible patients, according to The Lund Report

The lawsuit — filed in U.S. District Court on Feb. 22 — alleges that plaintiff Kristine Reiger was treated for a car crash at St. Charles in 2022. Her income of $25,240 rendered her eligible for charity care. But the health system did not screen her for financial assistance or work with her on a payment plan, and instead sent her to debt collector Ray Klein Inc., according to the lawsuit. 

"St. Charles and Ray Klein have a standard practice of failing to screen patients for financial assistance and subsequently initiating debt collection actions against patients on those alleged hospital debts despite this failure," the lawsuit says. 

The lawsuit alleges hundreds of other patients have been affected and requests that the judge certify the suit as class action so others can join. It claims that Ms. Reiger paid at least $1,339.18 to Ray Klein and St. Charles that should have been covered by the hospital, and seeks an unspecified award for "actual damages, punitive damages, statutory damages, attorneys' fees and costs."

Ray Klein Inc., operates in Springfield, Ore., under the name Professional Credit Service. It agreed to settle a 2022 lawsuit that it illegally collected consumer debts for $2 million, but denied wrongdoing, according to The Lund Report. 

Alandra Johnson, St. Charles Health System's public information officer, told Becker's Feb. 27 that the system had not yet been served with the suit and could not comment on specifics. However, she stated that the system provides approximately $120 million annually in unreimbursed care, regularly reviews its financial assistance policies and processes, and believes it is in compliance with regulations. 

St. Charles is not the only Oregon system to be called out over charity care. In 2019, the state inked a law requiring nonprofit hospitals to screen all patients within 200% of the federal poverty level for discounts. However, a February 2023 report from patient advocacy group Dollar For found that since the requirement went into effect, 42 of Oregon's 60 hospitals gave less charity care than they did the year before. The report alleged that hospitals are "not meaningfully screening patients for financial assistance eligibility but are instead sending low-income patients to collection." 

In July, Oregon's governor signed a law bolstering patients' protections from medical debt. The provisions, effective Jan. 1, require nonprofit hospitals to screen patients who have bills of $500 or more for financial assistance; apply financial assistance before patients receive the bill; give full refunds to eligible patients who have already paid; and make financial assistance appeals processes and applications easily available online. 

Such legislation has been cited in a few other lawsuits in the Pacific Northwest. The lawsuit against St. Charles is similar to one filed in November against Klamath Falls, Ore.-based Sky Lakes Regional Medical Center. And in February, Renton, Wash.-based Providence announced it would provide $157.8 million in refunds and debt relief to low-income patients after a lawsuit alleged it pressured patients who could have received financial assistance to pay their medical bills. Oregon's attorney general has also been investigating Providence — which operates eight hospitals in the state — after a preliminary finding from the state's health authority indicated it had improperly billed up to 108,000 low-income members of the Oregon Health Plan.

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