CHI Franciscan enters $25M settlement over charity care practices

Tacoma, Wash.-based CHI Franciscan has agreed to forgive medical debt and rehabilitate the credit of thousands of patients who qualified for charity care at its acute care hospitals between 2012 and 2017 but did not receive it, according to a press release from the Washington Attorney General's Office.

CHI Franciscan entered into the agreement after Washington Attorney General Bob Ferguson sued St. Joseph Medical Center in Tacoma, one of CHI Franciscan's hospitals, in 2017 over its charity care practices. The lawsuit alleged St. Joseph Medical Center violated the Washington Consumer Protection Act by failing to make charity care accessible to thousands of low-income patients.

As a result of the lawsuit, CHI Franciscan is reforming its charity care practices across all of its eight acute care hospitals. The health system also agreed to forgive as much as $20 million in medical debt, pay the attorney general's office $2.5 million and issue refunds to affected patients. As of April 29, more than 5,400 patients had been identified who will receive automatic refunds totaling $2.2 million.

"Medical debt is one of the leading reasons why families get trapped in poverty," Mr. Ferguson said in a press release. "Hospitals are required to inform low-income patients about the availability of charity care. St. Joseph failed to live up to its duty, and imposed obstacles on vulnerable Washingtonians trying to access affordable care. Today's resolution rights a wrong committed against thousands of patients across Washington."

Between 2012 and 2017, the years covered by the settlement, CHI Franciscan provided nearly $116.8 million in direct charity care. 

"As a non-profit, charitable organization our mission emphasizes human dignity and social justice," Cary Evans, vice president of communications and government affairs at CHI Franciscan, said in an emailed statement. "Last year, we cared for 2.7 million patients and saw 324,611 emergency visits. We provided $25 million in charity in 2018 alone. Neither the AG, nor our records, indicate any patient who applied for charity care was ever denied if they qualified. Out of an abundance of caution, we are exceeding the requirements of state law and providing charity compensation to patients who may be in most need, even if they never applied for charity care or did not actually qualify at the time of service."

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