PeaceHealth required to pay millions to WA low-income patients

The Washington State Office of the Attorney General has required PeaceHealth to refund up to $13.4 million to thousands of low-income patients at five hospitals across the state, including Bellingham, after failing to inform them that they qualified for financial assistance.

The refunds will be distributed to over 15,000 people, some of whom will receive direct refunds and others will need to apply through a claims process.

PeaceHealth will mail checks totaling $4.2 million, including $400,000 in interest, to over 4,500 patients. The average direct payment will be over $900; eight people will receive more than $10,000 and about 50 will receive over $5,000.

PeaceHealth will also refund up to $9.2 million, including $900,000 in interest, to 11,000 people through the claims process. The attorney general’s office will notify qualifying people of how to apply for a refund.

According to the state attorney general’s office, the office began investigating PeaceHealth in 2020 and found that the healthcare system failed to screen patients for financial assistance eligibility, failed to meaningfully disclose available financial assistance and collected payment from people that the system knew were likely eligible. A settlement was filed in Whatcom County Superior Court in late November.

PeaceHealth wrote off the bills if the patient was sent four bills without paying but never informed them of their eligibility, according to the state general’s office. No patients had outstanding medical debt from care they received that was eligible for a refund.

PeaceHealth officials wrote in a statement that the healthcare system cooperated with the investigation.

“PeaceHealth is committed to identifying every single person who can benefit from charity care,” PeaceHealth general counsel Tom Karnes wrote. “We welcome this opportunity to continue to lead the way in charity care, providing physical and financial healing to the most vulnerable in our communities.”

Over the past five years, PeaceHealth said it provided charity care totalling $258 million to 66,300 patients, $83 million of which went to patients who hadn’t verified their income. PeaceHealth noted that the $4.2 million it will pay directly to people is less than 1.6 percent of its charity care expenditure since 2018. 

PeaceHealth will improve its screening of patients for financial assistance by asking about household income and size upon registration. The healthcare system will continue providing patients with financial assistance information.

In addition to Bellingham, patients in Sedro-Woolley, Friday Harbor, Longview and Vancouver were impacted.

The attorney general’s office said the violations occurred while Washington households earning at or below 200 percent of the federal poverty line were eligible for free or discounted out-of-pocket hospital expenses. However, a new Washington state law helps people earning up to 400 percent of the federal poverty level.

People can contact PeaceHealth at 877/314-2011 with questions about whether they qualify for a refund. People who don’t believe they are receiving the financial assistance they are entitled to on their hospital bill can file a claim with the state attorney general’s office.

More information about Washington’s medical financial assistance law and qualification is available at affordablehospital.wa.gov.