The Oregon Department of Justice is investigating Providence Health & Services in a move that puts the state’s largest health provider under widening scrutiny for its practices of billing and collecting from patients.
The Oregonian first reported on the investigation, which is civil and not criminal, and is assigned to the agency’s consumer protection division. This marks a change since late February, when a DOJ spokeswoman told The Lund Report the state was not investigating allegations made against the health system.
Washington state Attorney General Bob Ferguson sued Providence on Feb. 24, alleging “unfair and deceptive” debt collection collection practices that target the poor regardless of their eligibility for hospital charity care or Medicaid, the federal program that gives free care to poor people. The Washington state lawsuit claims Providence hired the consultant McKinsey & Company to start a collections program called “RevUp,” which explicitly trained employees in sophisticated techniques to extract funds from patients regardless of their ability to pay.
On Monday, a Department of Justice spokesperson said an investigative file was opened within a matter of weeks.
“We began reviewing this when we learned about Washington’s lawsuit in late February,” said spokesperson Michael Kron in an email to The Lund Report. “We took the internal administrative step of opening a file in April.”
A Providence spokesperson had no immediate comment on the new development.
In the past, the provider has denied wrongdoing. A spokesperson said Providence doubled its financial assistance given annually in Oregon to $150 million, including nearly $61 million in free and low-cost care in 2020, adding that the system does "not engage in and do not authorize any third-party agency to engage in" garnishing wages, charging interest, reporting accounts to credit rating agencies, or initiating lawsuits and liens against patients.
In September, the New York Times published an investigation of the allegations that included accounts of people in Oregon.
The matter has sparked broader scrutiny of the practices of Oregon’s hospitals — not just Providence-affiliated. The Service Employees International Union Local 49 recently released a report saying that eight of Oregon’s 10 hospital systems ask for information about assets and bank balances, even though state law says charity care is only based on income, not wealth.
The seven-state system earlier reported that even though revenues overall were up for the nine months of 2021 compared to the same period a year earlier, costs were also up. The system reported an operating loss of $405 million for the nine months, on revenues of over $20 billion.
Separately, Providence’s investment portfolio gained $937 million in that period, hitting about $13 billion, more than offsetting the operating loss.
You can reach Ben Botkin at [email protected] or via Twitter @BenBotkin1.