Providence targeted by Oregon consumer protection probe

This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

  • The Oregon Department of Justice’s consumer protection division is conducting a civil investigation into Providence Health & Services, the state’s largest hospital system, a spokesperson for the department confirmed to Healthcare Dive on Friday. Oregon DOJ spokesperson Kristina Edmunson declined to comment on the scope of the probe, which was first reported by the Oregonian. A Providence spokesperson did not respond to a request for comment by deadline.
  • The consumer probe follows a New York Times report last month that described aggressive billing practices targeting patients who should have received free or discounted care by the Renton, Washington-based hospital chain. After the report, Providence said it would refund 760 low-income patients who were entitled to free care.
  • The Oregon investigation also comes 10 months after Washington Attorney General Bob Ferguson filed a lawsuit accusing 14 Providence hospitals of sending more than 54,000 patients eligible for charity care to collection agencies and violating thousands of state consumer protection laws in their efforts to collect money.

Dive Insight:

The New York Times article prompted Sen. Patty Murray, D-Wash, to send a letter to Providence CEO Rod Hochman demanding answers about the nonprofit’s billing practices, including allegations of pressuring patients to pay at their hospital beds and sending debt collectors to hound them. The hospital chain’s actions hurt patients’ credit scores and discouraged people from seeking future medical care, Murray wrote.

Providence’s alleged actions date back to 2018, when the system adopted a program designed by McKinsey & Co. dubbed Rev-Up. The plan instructed hospital employees to acknowledge the availability of financial assistance only after other steps to collect payment failed, Murray, who chairs the Senate Committee on Health, Education, Labor and Pensions, said in the letter dated Sept. 28.

The health system’s collections department was expected to meet monthly collections goals, and patients were routinely sent to debt collection agencies, Murray said in the letter, citing the Times report.

“Patients seeking care at Providence’s hospitals should not face these types of aggressive tactics at their most vulnerable moments,” Murray said.

A Providence spokesperson called the Times’ coverage a “false narrative” that suggested the hospital system was taking advantage of the poor. “This could not be further from the truth,” the spokesperson told Healthcare Dive earlier this month. The Rev-Up training materials were “not consistent with our values,” and the patients who will receive refunds were asked to pay due to a computer error, the spokesperson said.

Providence spent 1.24% of expenses in charity care, below the 2.3% industry average, in 2018. By 2021, the system’s charity care spending had fallen below 1%, while the industry average rose slightly to 2.4%, Murray’s letter said.