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Providence Settles Charity Care Billing Investigation: A Momentous Step Towards Compliance and Transparency in Healthcare

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Zara Nwosu
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Providence Settles Charity Care Billing Investigation: A Momentous Step Towards Compliance and Transparency in Healthcare

Providence Settles Charity Care Billing Investigation: A Momentous Step Towards Compliance and Transparency in Healthcare

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In a significant development in the healthcare sector, Providence, a healthcare system in Washington, has agreed to refund $158 million and erase debt as part of a settlement to address a charity care billing investigation. This investigation was centered around the hospital's compliance with state charity care laws and regulations. This settlement, the largest of its kind in the country, marks a crucial step towards addressing the issue of charity care billing and underscores the importance of compliance with healthcare regulations.

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Understanding the Settlement

According to a report by Fierce Healthcare, the settlement was reached with the Washington State Attorney General. It includes refunding or erasing $157.7 million in medical care payments to patients who may have been eligible for charity care and financial assistance. Plus, it involves a $4.5 million payment to the Attorney General's office and a commitment from Providence to provide all patients with information about financial assistance.

Prior to the settlement, Providence had already refunded close to $230,000 to approximately 1,500 Medicaid accounts and forgiven $125.8 million of medical debt. The allegations against Providence argued that the healthcare provider had trained its staff to aggressively seek payments from patients who likely would have qualified for financial assistance and sent thousands of Medicaid patients to debt collectors. The average payment that will be sent to patients receiving refunds is about $478, while the average write-off exceeds $900.

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Implications of the Settlement

Washington's charity care law now covers roughly half of all residents, making them eligible for free or reduced-cost care at hospitals in the state. This settlement, hence, will greatly benefit low-income residents, with nearly $21 million in medical bills being refunded and $137 million more in outstanding debt being erased. Providence has already erased about $125 million in medical debt following the state’s lawsuit two years ago.

Further, the settlement includes $20.6 million in repayments plus 12% interest to 34,229 patients who may have qualified for charity care and financial assistance, and $137.2 million of medical debt forgiveness for 65,217 others. The agreement also involves a commitment from Providence to follow certain practices to ensure adherence to the healthcare regulations and laws.

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Far-reaching Impact on Healthcare Organizations

This development could potentially have far-reaching implications for other healthcare organizations and their approach to charity care. It emphasizes the need for healthcare providers to ensure their practices are in line with charity care laws and that patients eligible for financial assistance are not unjustly burdened. The state's hospital lobby, however, has pushed back against updates to the law's language to include non-residents.

Overall, the settlement marks a significant stride in charity care enforcement, with Washington Attorney General Bob Ferguson's office having recouped $205 million in debt forgiveness and refunds for residents. This could set a precedent for other states to follow in ensuring healthcare providers adhere to charity care laws and regulations, thereby making healthcare more accessible for all.

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