Providence recently issued a letter responding to a series of questions raised by a senator about its debt collection practices.

The letter was a response to one sent by Sen. Patty Murray, a Democrat of Washington to Rod Hochman, Providence’s president and CEO, on September 28. Murray’s letter pressed for answers about the 52-hospital health system’s debt collection practices. She wrote it just days after a New York Times report emerged detailing Providence’s efforts to aggressively bill patients who qualified for free or discounted care.

The health system’s payment collection practices have been under scrutiny since February when Washington’s attorney general filed a lawsuit against Providence, alleging that 14 of its hospitals were “aggressively collecting money from charity care eligible low-income Washingtonians.”

Murray demanded Providence speak up about the “disturbing” practices alleged in the report, including “high-pressure billing conversations at hospital beds when patients are vulnerable, the use of extraordinary collection actions by debt collectors, and patients eligible for free or discounted care being billed for outstanding balances.” 

In the letter, she pointed out that Providence patients have gone without food or heat, witnessed their credit scores plummet, and been afraid to seek further healthcare services “all as a result of practices that potentially violate both state and federal laws.”

Giving Providence an October 12 deadline, Murray demanded it provide data on the number of patients the health system provided care to in recent years who were eligible for free or discounted care, along with how many it sent to debt collection services. 

Hochman sent his response letter on the day of Murray’s deadline. In his response, he said the health system’s policy prevents it from sending patients who are identified as charity care or Medicaid eligible to collections.

Murray also requested information about how much Providence paid McKinsey & Co. to design “Rev-Up,” a program for growing revenue. Rev-Up trained employees on how to pressure patients to pay for their care and instructed them to withhold information on financial assistance, according to Murray’s letter. The program’s steps were to “ask for full payment, then ask for half payment, then offer a payment plan, and, only after all other efforts had failed, acknowledge the existence of financial assistance,” she wrote.

Rev-Up “was a short-lived, limited program that no longer exists,” Hochman said. He did not disclose how much Providence paid McKinsey to design the program.

“The intent was not to target those in financial distress,” Hochman wrote. “Rather, it focused on helping those who are commercially insured and have the means to pay, better understand their out-of-pocket costs. We acknowledge that the original training materials, and even the name Rev-Up, were not consistent with our values.”

He noted that Providence “has significantly scaled back” its use of consultants.

Hochman’s response also said that Providence has begun issuing refunds with interest to Medicaid patients who made payments after being sent to collections due to an error that the health system has now resolved.

Providence’s six-page letter denied that it aggressively pursued its poorest patients for medical debt, asserting that its “commitment to those in need has never been stronger.”

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