The largest hospital network in the state, Providence Health & Services, is the subject of an investigation by the Oregon Department of Justice.
According to Kristina Edmunson, a department spokesperson, the department’s division responsible for consumer protection is heading the investigation. She added that the probe is currently civil rather than criminal.
Edmunson opted not to provide any further detail about the investigation’s focus and parameters.
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However, the Washington state attorney general filed two cases against Providence and a number of its Washington hospitals roughly 10 months prior to Oregon’s investigation. Attorney General Bob Ferguson alleged that Providence “engaged in unfair and deceptive activities” geared at collecting money from the impoverished, even if it meant sending their invoices to a collection agency,” despite its professed objective of aiding the needy.
Regarding the Oregon probe, Providence did not respond right away.
The New York Times published a thorough investigative series in late September about the tactics Providence implemented to improve payments from underserved patients at the advice of McKinsey & Co. experts. According to the news outlet, Providence and other nonprofit hospitals often attempted to make people pay even when they were entitled to free care.
One of the biggest hospital networks in the nation, Providence has significant operations all along the West Coast, in New Mexico, and in west Texas. In 2021, their whole operating income was more than $27 billion. It ended the year with $34.8 billion in total assets and $1.1 billion in cash on hand. In 2020, Providence paid Rod Hochman, its chief executive, $10 million.
Providence was established by Catholic nuns with the explicit goal of helping the underprivileged. Providence has been given nonprofit status by the government, which exempts it from paying income taxes in exchange for adhering to that objective.
Ferguson asserts that Providence has embraced a new, tough tactic that its original nuns wouldn’t approve of.
Ferguson said in the lawsuit that Providence instructs and encourages its employees to give the idea that all of their patients are required to pay for their care regardless of their income level rather than screening patients for eligibility for charity care.
Even when Providence finds patients who qualify for charity care, it sends many of their accounts to debt collectors with the aim of getting some money from clients that Providence is aware are unable to pay.
All wrongdoing is refuted by Providence. The morning after the Times article was published, Providence referred to it as an “absurd narrative” in an email to staff members.
Providence informed its staff that it had given free medical attention to 266,000 people in need in the previous year. Despite suffering large operating losses as a family of organisations, including more than almost $1 billion in losses thus far this year, we also continue to raise our community benefit levels year over year. These setbacks have not and will not have an impact on our dedication to our Mission.
However, Providence did start reaching out to patients and refunding payments in September after getting in touch with the Times but prior to the publication of its piece. The medical system claimed that was already planned.
In August, Ferguson added to his allegations against Providence. He revised the complaint to add two more defendants, collection firms Harris & Harris and Optimum Outcomes, both employed by the hospital network.
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The legal and public relations issues arise as Providence and the majority of the other hospitals in the region are battling fiercely to adjust to the challenging new post-COVID reality of labour shortages that have slowed the typical patient discharge procedure.
Hospitals are in serious financial trouble as a result of having to replace a generation of nurses who were worn out and frustrated by the pandemic and paying for patients who were detained in treatment units. In the first half of the year, Providence suffered enormous losses, amounting to $5.24 billion.
Setbacks in investments were a major contributor to the loss. On an operating basis, expenses were $934 million higher than revenues.
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