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SEIU Questions Hospital Billing Practices 

The union representing health care workers says hospitals throughout Oregon fail to comply with state laws for charity and billing.
Providence Milwaukie Hospital. | PROVIDENCE HEALTH & SERVICES
October 12, 2022

Oregon hospital systems fail to comply with state laws for patient charity care and put applicants through a maze of red tape and barriers when they apply for financial help, according to the union that represents many of their employees. 

The new report was authored by researchers with the Service Employees International Union Local 49, which has more than 15,000 members in Oregon, Washington and Idaho, mostly in hospitals. Researchers issued the report amid litigation filed by Washington state’s attorney general against Providence Health & Services-Washington, alleging its hospitals in that state systematically failed to notify patients they may be eligible for charity help even as the hospitals directed collections agencies to pursue patients for payment.

The union’s report scrutinizes Providence, Oregon’s largest health care provider, and nine other non-profit hospital systems in the state. Researchers gathered policies and application forms and spoke to low-income patients who tried to use the hospitals’ charity care systems for help covering their bills.

Hospitals’ charity care systems are supposed to help cover the medical expenses of low-income patients who lack sufficient insurance coverage and cannot afford out of pocket costs.

Oregon’s hospital industry trade group criticized the SEIU report as a “limited and incomplete picture.”

The SEIU report’s findings include:

  • Eight of 10 hospital systems asked patients for information about assets and bank balances, even though a 2019 state law is clear that charity care is based only on income.
  • Six hospital systems have policies that bills are sent to collections in 120 days. That’s half the 240-day window that people have to apply for charity care under federal law.
  • The charity system can be overly complex to navigate, with some systems lacking an online option to apply, or requiring an application even when the hospitals already have the information necessary to award financial help.
  • Hospital systems also have vague language about whether the charity care covers services in clinics, even though state law requires clinic services to be covered too.

The findings also raise questions about the willingness of hospital systems to follow their mission as non-profits that enjoy the benefit of tax breaks even while sending the bills of poor patients seeking charity care to collection agencies.

“Laws are not being followed,” said Kirsten Isaacson, research director of SEIU Local 49, in an interview with The Lund Report. “If hospitals are going to continue to claim tax breaks that go along with their non-profit status, we have to be able to trust that they will comply with the law.” 

Laura Johnson, a researcher with the union, said the existing laws for charity care are good, but there need to be consequences for hospitals that don’t follow them. 

Prior to releasing its report, the SEIU contacted the Oregon Association of Hospitals and Health Systems in December 2021 to notify it that its financial assistance form was out of compliance with state law. The trade group updated the recommended form, but only two hospital systems out of 10 reviewed are using a compliant form, according to the report. 

Hospital Industry Responds

In a statement, the hospitals trade group defended the industry. 

”SEIU released a document at a suspect time that provides a limited and incomplete picture of hospital financial assistance practices,” said OAHHS CEO Becky Hultberg in a statement. “In a complicated and overregulated health care system, it’s not surprising that there could be differing views on these practices.”

Hultberg said Oregon hospitals provided nearly $1.3 billion in charity care from 2015 through 2020 and welcome patients regardless of their ability to pay.

However, hospitals define “charity care” very broadly. It includes not only the free care that hospitals provide to uninsured or underinsured low-income patients, but it also includes the difference between the supposed true market cost of providing care and the lower amount that Medicare and Medicaid pay hospitals to care for Medicaid and Medicare patients.

“At a time when patient care is threatened due to staffing shortages and financial instability, we must work together to preserve access to care in Oregon communities,” Hultberg said.

In a statement, a Providence spokesperson said the system has stepped up its efforts this year to make patients aware of financial assistance options through social media, blogs and other means.

“We absolutely understand how stressful it can be to deal with medical bills,” according to the Providence statement. “We take this incredibly seriously and don’t want financial hardship to ever get in the way of needed care or the healing process. That is why we communicate about the availability of financial assistance in multiple ways throughout a patient’s journey with us.”

Providence supported 2019 legislation regarding hospital charity care in Oregon, according to the statement. It provided $65.1 million in free and low-cost care in Oregon 2021, part of $573 million in community benefit spending. That community benefit figure includes the difference between the market value of services and the payments from Medicaid and Medicare.

Relative to its counterparts, Kaiser Permanente provided more information to consumers, complying with the law in a number of areas, according to the report. In a statement, a spokesperson said the provider is working to get care for people who would otherwise only get help in an emergency room. 

“We’re working to change that with programs that lower financial barriers by providing medical financial assistance and deeply subsidized health coverage,” spokesperson Michael Foley said in an email. “We also provide information about how to access and qualify for public programs such as Medicaid and financial assistance through the marketplace to individuals who may be eligible.”

Personal Stories

The SEIU report detailed personal stories of patients trapped in the cycle of debt. They included:

  • A Klamath Falls man owed $12,000 after insurance for a hip replacement and worked a $36,000-a-year job. He started making $25-a-month payments and the hospital demanded $200 a month – which he couldn’t afford. Eventually, his paycheck was garnished and the creditor threatened to put a lien on his home.
  • A Portland woman has spent years paying nearly $5,000 owed after treatment for an infection. After wage garnishments, she still owes more than $2,200 for court fees and interest. She’s already paid more than the original debt amount.
  • A Coos County woman owes more than $70,000 over care for high-risk pregnancies, accidents and chronic health conditions. She was never told about the possibility of charity care. Now, her wages are garnished $1,000 a month.

You can reach Ben Botkin at [email protected] or via Twitter @BenBotkin1.