PeaceHealth, a WA-based health system, agrees to reimburse $4 million to 4,000 patients due to undisclosed charity care policies. The State of Washington filed a complaint against PeaceHealth for violating consumer protection laws. PeaceHealth’s neglect in screening charity care eligibility led to collecting payments without due diligence. Despite a proactive analytics tool, patients qualifying for charity care were billed without disclosure. As part of the settlement, PeaceHealth vows reimbursement, improves screening procedures, and covers costs. This commitment signifies rectification and better support for vulnerable communities.
PeaceHealth, a prominent non-profit health system based in Washington, has committed to reimbursing $4 million to around 4,000 patients following a failure to disclose charity care policies before collecting payments. This substantial step also involves overhauling their patient screening methods for charity care eligibility.
PeaceHealth’s Patient Reimbursement Resolution
The agreement transpired after a complaint filed by the State of Washington against PeaceHealth for allegedly violating the Washington Consumer Protection Act and the Charity Care Act. The Charity Care Act, which was expanded on July 1, 2022, requires Washington hospitals to furnish free or low-cost care to individuals with limited income, raising the eligibility threshold from 200 percent to 400 percent of the federal poverty level (FPL).
Under charity care regulations, hospitals must diligently assess a patient’s insurance status, annual family income, and eligibility for charity care before commencing any collection endeavors.
The lawsuit asserted that PeaceHealth neglected to screen patients for charity care eligibility before seeking pre-service deposits or estimates for specific medical procedures. Moreover, the health system attempted to collect payments during registration without verifying eligibility, as highlighted in the complaint.
PeaceHealth has implemented a predictive analytics tool in its billing process since 2018 to proactively identify patients likely eligible for charity care using publicly available data. Despite this, the lawsuit alleged that the health system persistently pursued billing and collection actions against patients who likely qualified for charity care, resulting in substantial payments without disclosing their potential eligibility. Notably, PeaceHealth later provided charity care to these patients but failed to refund partial payments or notify them of their eligibility status.
In response to the investigation, PeaceHealth conveyed cooperation with the Attorney General, furnishing documents and evidence to demonstrate compliance with the law and efforts to inform patients about financial assistance availability.
Although PeaceHealth emphasizes offering financial aid to patients who exceed charity care eligibility but encounter payment difficulties, the health system has pledged to reimburse $4 million to approximately 4,000 patients who neither applied for assistance nor responded to outreach efforts. Notably, this reimbursement constitutes less than 1.6 percent of the $258 million PeaceHealth allocated for charity care since 2018.
As part of the agreement, PeaceHealth will refine its screening process for financial assistance by enquiring about household income and size during patient registration. Additionally, regardless of their initial response, all patients will receive information about financial aid and guidance on the application process.
Furthermore, PeaceHealth will cover $2 million in costs and attorney fees and notify additional eligible patients who may seek similar reimbursements for previous payments.
In a press release, Tom Karnes, PeaceHealth’s general counsel, affirmed the institution’s commitment to identifying and supporting individuals eligible for charity care. Karnes expressed the health system’s eagerness to further its leadership in charity care provision, aiming to deliver both physical and financial healing to vulnerable communities.
Karnes added that opting for an agreement instead of protracted litigation enables PeaceHealth to focus on its healing and health justice mission, avoiding resource diversion.
The status of non-profit health systems has come under scrutiny lately, as these entities are exempt from various taxes but obligated to reinvest their profits into charity care and community initiatives. Reports, such as the one from the Lown Institute, have pointed out that non-profit hospitals received more in tax breaks than they spent on charity care in 2020. However, the American Hospital Association (AHA) has maintained that non-profit hospitals consistently provide adequate charity care to their patients.
The commitment by PeaceHealth to compensate affected patients and revamp its charity care screening process reflects a proactive step toward rectifying shortcomings and ensuring better support for those in need within their communities.
PeaceHealth’s agreement to reimburse patients and reform charity care screening signifies a critical step toward rectifying past discrepancies. This resolution addresses the undisclosed policies that led to improper billing practices. The commitment to reimburse affected patients and refine screening processes underscores the health system’s dedication to ensuring better support and financial aid for vulnerable populations. By resolving these issues, PeaceHealth reaffirms its commitment to upholding charity care standards and healing within its communities.
