Providence Regional Medical Center Everett. (Olivia Vanni/The Herald via AP)

Providence Regional Medical Center Everett. (Olivia Vanni/The Herald via AP)

Judge fines Providence debt collectors for deceiving low-income patients

Optimum Outcomes must pay over $827K for withholding disclosures in nearly 83,000 bill collection notices.

EVERETT — Providence debt collector Optimum Outcomes must pay just over $827,000 for violating patients’ debt collection rights, a judge ruled last week in King County Superior Court.

Judge Sean O’Donnell ruled the agency violated the state Consumer Protection Act by withholding debt collection rights disclosures — including the right to apply for financial aid — in nearly 83,000 collection notices to Providence patients. The money, a $10 penalty for each violation, will go to the state general fund.

Fox Rothschild LLP, the Seattle-based law firm representing Optimum Outcomes, did not immediately respond to a request for comment Monday.

Optimum Outcomes was the final defendant in Attorney General Bob Ferguson’s lawsuit against 14 Providence hospitals and two debt collectors for practices that allegedly kept patients from financial aid. The rulings and court settlements have garnered more than $160 million in refunds and debt forgiveness for Providence patients, as well as $1 million to continue the state’s consumer protection enforcement efforts. In all, Providence’s practices violated the Consumer Protection Act more than 100,000 times, according to the state.

“This legal victory resolves the largest charity care lawsuit in American history,” Ferguson said in a press release last week. “We delivered economic justice for Washingtonians in the form of corporate reforms and more than $160 million in direct payments, debt forgiveness and civil penalties.”

Washington is the first state to enforce its medical financial aid — or charity care — protections on a large scale. The Providence lawsuit was the largest of four charity care cases, including local hospital chains PeaceHealth and CHI Franciscan as well as Capital Medical Center in Olympia. In total, the cases have garnered more than $205 million in debt forgiveness and refunds.

(Washington State Attorney General’s Office)

(Washington State Attorney General’s Office)

Ferguson has also worked to strengthen the state’s charity care law, first established in 1989, and expand medical financial aid access across the state. About half of people in the state — or those with incomes at or below 300% of the federal poverty level — are now eligible for free or discounted care at the state’s largest hospital systems.

‘Sending the poor to bad debt’

From 2018 to 2022, Providence billed and collected money from low-income patients without letting the patients know they qualified for financial aid, according to the lawsuit filed in February 2022. The strategy deceived patients into believing they “had no choice but to pay their bills,” and put the burden on patients to self-identify their charity care status, according to the attorney general’s office.

At that time, Washington hospitals had to provide free or reduced-cost care to patients with incomes at or below 200% of the federal poverty level. The scale ranged from a one-person household, at $30,120 or less, to a four-person household, at $62,400 or less.

(Washington State Attorney General’s Office)

(Washington State Attorney General’s Office)

In 2020, Ferguson began investigating Providence after receiving complaints about collection practices that diverted patients from financial aid. Ferguson’s investigation revealed Providence trained staff to collect money with tactics such as:

• Asking patients to pay outstanding medical costs every time;

• Refusing to accept the first ‘no’;

• Asking for partial payments; and

• Suggesting to patients that payment is expected.

Per the state’s Charity Care law, hospitals must tell patients about charity care, determine if patients qualify before trying to collect payment, and only require one income-related document to apply. Hospitals also must suspend all collection attempts for a reasonable time to allow patients to apply.

Internal emails revealed Providence sent thousands of patients who likely qualified for aid — including Medicaid patients — to debt collectors to increase the chances of full payment, according to the lawsuit. When Providence later canceled debt for some Medicaid patients, the company did not notify the patients of the mistake or their eligibility for future financial help.

“We are sending the poor to bad debt and not treating them the same as other patients,” one employee warned in internal records dug up in Ferguson’s investigation.

In a court settlement Feb. 1, Providence agreed to forgive $137 million in medical debt and refund more than $20 million to nearly 100,000 patients.

‘Collectors must play by the rules’

Ferguson added two debt collection agencies, Harris & Harris and Optimum Outcomes, to the lawsuit in the summer of 2022. The agencies failed to notify patients about their right to apply for charity care, according to the lawsuit.

State law requires collection agencies to send a first collection notice with mention of charity care and the hospital’s contact information to determine if a patient qualifies.

Harris & Harris sent at least 294,000 collection notices without the disclosures to about 166,000 patients, according to the lawsuit. The agency collected nearly $25 million since contracting with Providence in 2019, earning $1.7 million in commission.

On Feb. 21, Harris & Harris agreed to pay $1 million. The collector must also provide patients with their medical debt collection rights in all first written notices going forward, per the agreement.

“Debt collectors must play by the rules,” Ferguson said in a press release at the time. “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.”

The state will enforce its agreements with Providence and Harris & Harris, Ferguson said.

Per last week’s ruling, Optimum Outcomes must reimburse Ferguson’s office at least $400,000 for legal fees. The agency must also make reforms in compliance with state law.

Washington’s charity care law and qualification tools can be found at Those with concerns about their hospital’s financial aid practices can file a complaint with the Attorney General’s Office.

Sydney Jackson: 425-339-3430;; Twitter: @_sydneyajackson.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Snohomish residents Barbara Bailey, right, and Beth Jarvis sit on a gate atop a levee on Bailey’s property on Monday, May 13, 2024, at Bailey Farm in Snohomish, Washington. Bailey is concerned the expansion of nearby Harvey Field Airport will lead to levee failures during future flood events due to a reduction of space for floodwater to safely go. (Ryan Berry / The Herald)
Harvey Field seeks to reroute runway in floodplain, faces new pushback

Snohomish farmers and neighbors worry the project will be disruptive and worsen flooding. Ownership advised people to “read the science.”

IAM District 751 machinists join the picket line to support Boeing firefighters during their lockout from the company on Thursday, May 16, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Amid lockout, Boeing, union firefighters return to bargaining table

The firefighters and the planemaker held limited negotiations this week: They plan to meet again Monday, but a lockout continues.

N3054V accident site. (Alaska State Trooper Photo)
Lake Stevens pilot, who lived ‘Alaska dream,’ died in Fairbanks crash

Former Snohomish County lawyer Harry “Ray” Secoy III, 63, worked as a DC-4 pilot in Alaska in the last years of his life.

Air and ground search and rescue teams found Jerry Riedinger’s plane near Humpback Mountain on Monday. (WSDOT photo)
Remains of pilot recovered near Snoqualmie Pass after Arlington flight

Jerry Riedinger never made it to Ephrata after departing the Arlington airport Sunday. Investigators have not determined the cause of the crash.

Federal prosecutors say the two men shown here outside the U.S. Capitol on Jan. 6, 2021, are Tucker Weston, left, and Jesse Watson. (U.S. Attorney’s Office for the District of Columbia)
Lynnwood roommates sentenced for roles in Jan. 6 riot

Tucker Weston was given two years in prison Thursday. Jesse Watson received three years of probation in August 2023.

Lynnwood firm faces $790K in fines for improper asbestos handling

State regulators said this is the fifth time Seattle Asbestos of Washington violated “essential” safety measures.

A truck towing a travel trailer crashed into a home in the Esperance neighborhood Thursday, May 23, 2024, in Edmonds, Washington. (South County Fire)
Man seriously injured after his truck rolls into Edmonds home

One resident was inside the home in the 22500 block of 8th Avenue W, but wasn’t injured, fire officials said.

Ferry workers wait for cars to start loading onto the M/V Kitsap on Friday, Dec. 1, 2023 in Mukilteo, Washington. (Olivia Vanni / The Herald)
The Memorial Day holiday weekend travel nightmare is upon us

Going somewhere this weekend? You’ll have lots of company — 44 million new BFFs — on planes, trains and automobiles.

Bothell family says racism at Seattle Children’s led to teen’s death

In February 2021, Sahana Ramesh, the daughter of Indian immigrants, died after months of suffering from a rare disease.

Boeing Firefighters and supporters have a camp set up outside of Boeing on Airport Road as the company’s lockout of union firefighters approaches two weeks on Thursday, May 16, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Union firefighters reject Boeing’s latest contract offer

The union’s 125 firefighters on Wednesday overwhelmingly rejected the offer, which included “an improved wage growth” schedule

A “No Shooting” sign on DNR land near Spada Lake is full of bullet holes on Thursday, Feb. 8, 2024, along Sultan Basin Road near Sultan, Washington. People frequent multiple locations along the road to use firearms despite signage warning them not to. (Ryan Berry / The Herald)
County pumps the brakes on planned Sultan shooting range

The $47 million project, in the works for decades, has no partner or funding. County parks officials are reconsidering its viability.

Suzan DelBene, left, Rick Larsen
Larsen, DelBene request over $40M for projects in Snohomish County

If approved, Congress would foot the bill for traffic fixes, public transit, LED lights and much more around the county.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.