The firm will pay $1 million to resolve the lawsuit, which involved state-specific laws on financial assistance disclosures in letters to consumers.
02/22/2024 4:55 P.M.
3 minute read
Earlier this month, Washington Attorney General Bob Ferguson and Providence, one of the nation’s largest health care systems, reached an agreement regarding a 2022 charity care practices lawsuit. On Feb. 21, the attorney general also announced an agreement with the one of the collection agencies involved that was hired to collect outstanding debt from those patients.
The agreement requires the agency, Harris & Harris, to pay the attorney general’s office $1 million and continue to include legally required disclosures in first written collection notices in the future, according to a news release. Harris & Harris will send notices about consumer education to approximately 166,000 Washington consumers who received the letters that lacked the disclosures. They will receive a letter explaining their medical debt collection rights, including their right to apply for financial assistance on hospital bills. The $1 million will fund future consumer protection enforcement work.
“Washingtonians have a right to know about certain protections related to medical debt, and debt collectors have an obligation to inform them of those rights,” Ferguson said. “We will continue to enforce these protections on medical debt.”
Harris & Harris provided a statement to ACA International:
“After a year and a half of litigation, Harris & Harris is pleased to have resolved this matter with the Washington Attorney General’s Office. While we maintain that our collection notices have always been compliant with Washington law, we believe that this settlement is in the best interest of the company and our stakeholders. Our clients can rest assured that this settlement will not impact our day-to-day operations, and we will continue to serve them with the same dedication and excellence they have come to expect from Harris & Harris. As always, we remain committed to upholding the highest standards of compliance in every aspect of our business. We will continue to be diligent and do work that matters.”
In 2022, Ferguson amended a state court lawsuit alleging violations of the Washington State Collection Agency Act and Consumer Protection Act by 14 Providence Health & Services Hospitals to include two collection agencies working with patients on behalf of the hospitals: Harris & Harris and Optimum Outcomes. The attorney general claimed the agencies allegedly failed to include certain required disclosures in letters to consumers, ACA International previously reported.
The trial for Optimum Outcomes is ongoing.
Under the terms of the February 2024 agreement, Providence must forgive more than $137 million in medical debt and refund more than $20 million to patients the company billed for services despite knowing they likely qualified for free or reduced-cost health care. The $157.8 million resolution will provide full refunds, plus interest, and debt forgiveness for 99,446 individuals.
Lawsuit Claims
Ferguson’s lawsuit alleged that Providence hospitals committed Consumer Protection Act violations, including:
- Training employees to collect payment without regard for a patient’s eligibility for financial assistance.
- Failing to notify patients they were eligible for charity care financial assistance when the providers determined they qualified for assistance.
Member Takeaways
In a legal alert, ACA International member company Barron & Newburger P.C. said, “While the consent order is not binding on other debt collectors, it represents the enforcement position of the Attorney General. Businesses collecting medical debt in Washington may wish to analyze the order to determine whether they need to incorporate its non-monetary requirements into their policies and procedures.”
ACA members can find information on state-specific billing topics in the ACA SearchPoint document State Hospital Billing and Collection Practices (PDF) and charity care information in Regulations for Charitable Hospitals (PDF). Our updated State Communication Chart (PDF) includes new notations for medical debt notice requirements in Washington. See the “Notice to Consumer Rights” column.
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