CHARITY CARE Using WA Charity Care Law to

CHARITY CARE: Using WA Charity Care Law to Protect Consumers Northwest Justice Project & Columbia Legal Services May 31, 2017 Access to Justice Advocates’ Training

Washington State Supreme Court Civil Legal Needs Study Update - 2015

Part of the Problem Is Financial Incentives • Hospitals have financial incentive to identify third-party payors including private insurers, Medicare, Medicaid, etc. and are very good at doing that (Resource Corporation of America) • No financial incentive to identify patients who qualify for charity care – simply asking for income and family size information at or near the time of service

Most Patients Fall Through Charity Care Safety Net • Low-income patients don’t get charity care they should be getting under WA law • Low-income patients are sued for hospital bills they shouldn’t have gotten in first place (typically when advocates get these cases)

Denial of Charity Care Even Worse Because of “Chargemaster” Rates • Uninsured patients charged full, undiscounted hospital rates (“Chargemaster”), double or triple what third-party payors pay for same services

Where All the Eligible Charity Care Patients? • In WA, there are over 570, 000 uninsured patients who are “medically indigent” and eligible for Charity Care. • If Medicaid expansion (ACA/Obamacare) is repealed, this number will go even higher, probably to over a million patients. • Based on DOH data, it appears that only a small fraction of eligible patients are receiving Charity Care.

Charity Care: What is it and how does it work? • By Ariel Speser • Northwest Justice Project, Port Angeles

Charity Care Law • Revised Code of WA: 70. 170. 060 • WA Administrative Code: WAC 246 -453

When does CC apply? • What is it? • Hospitals • “Medically necessary” • How does someone know if they are financially eligible? • Free care if income is below 100% of FPL • Discount required between 101% and 200% of FPL • Some hospitals provide free care up to 300% FPL • Assets not considered below 100% of FPL

Income & Family Size / Eligibility Grid Department of Health and Human Services issues poverty guidelines referred to as the “federal poverty level. ” (https: //aspe. hhs. gov/poverty-guidelines) Annual 2017 Poverty Guidelines for the 48 Contiguous States Household/ Family Size 100% 1 12, 060 2 16, 240 3 20, 420 4 24, 600 5 28, 780 Monthly 2017 Poverty Guidelines for the 48 Contiguous States Household/ Family Size 100% 1 1, 005 2 1, 353 3 1, 702 4 2, 050 5 2, 398 200% 24, 120 32, 480 40, 840 49, 200 57, 560 300% 36, 180 48, 720 61, 260 73, 800 86, 340 400% 48, 240 64, 960 81, 680 98, 400 115, 120 200% 2, 010 2, 707 3, 403 4, 100 4, 797 300% 3, 015 4, 060 5, 105 6, 150 7, 195 400% 4, 020 5, 413 6, 807 8, 200 9, 593

What about insurance? • Third-party payers billed first, e. g. private insurance, Medicaid, Medicare. • Charity Care covers both uninsured and underinsured (co-pays, deductibles, amounts outside coverage limits, etc. )

Notice & Initial Determination • Hospital’s Duty to Notify Patients About Charity Care • Hospital’s Affirmative Duty to Do Initial Screening

Affirmative DUTY to Screen Before Collection Attempts • “Initial determination of sponsorship status shall precede collection efforts directed to the patient. ” RCW 70. 170. 060(6) • “Persons who may be eligible for charity care shall be notified by the hospital” and “all persons with family income below one hundred percent of the federal poverty standard shall be deemed charity care patients for the full amount of hospital charges. ” RCW 70. 170. 060(5)

CHARITY CARE: 3 Simple Steps • Step One: Is the debt “hospital” debt? Includes outpatient care • Step Two: Is the patient eligible? Uninsured or underinsured? Qualifying income based on family size and poverty level • “Income” includes “total cash receipts before taxes … salaries, welfare payments, social security” and other benefits such as child support.

CHARITY CARE: Step Three • Step Three: Apply • To apply, patient/debtor must simply complete hospital’s application (can often print out application from hosp. website) • Documentation (pay stubs, tax returns, etc. , or letter signed by patient) • Collection proceedings are STAYED (stopped) while application is pending

Final Determination & Appeal Process • After receiving documents, hospital has 14 days to determine Charity Care eligibility WAC 246 -453 -020(7) • If hospital denies Charity Care, must explain reason and inform patient of 30 day appeal rights - WAC 246 -453 -020(8) & (9) • Stay of collection action continues during appeal - WAC 246 -453 -020(9)(a)&(b).

Appeal Process (Cont. ) • Patient’s internal appeal must be made within 30 days to hospital’s Chief Financial Officer or equivalent - WAC 246 -453 -020(9) • If hospital affirms denial, patient and DOH must be notified and hospital must provide DOH documentation showing basis for decision - WAC 246 -453 -020(9)(a)

Is There a Time Limit to Apply?

NO: May Apply “at any time” • Patient may apply AT ANY TIME, even after litigation is filed, which will stay litigation while application is pending • Hospital must allow patient to apply for Charity Care “at any time” even after bill is sent to collections • Collection process is STAYED during Charity Care determination if patient applies after collection litigation begins

Charity Care Case Examples & Practical Tips • By Julia Kellison • Northwest Justice Project, King County

Charity Care: Defending Against a Lawsuit

Applying for Charity Care Suspending Lawsuit to Allow Patient to Apply for Charity Care • Raise Charity Care as an affirmative defense • Sample Pro Se Answer Form with Charity Care Affirmative Defense in “How do I Answer a Lawsuit for Debt Collection? ” publication: http: //www. washingtonlawhelp. org • Sample Letters to Debt Collection Agencies or Opposing Attorneys in “Can I Get Charity Care Benefits To Pay for My Hospital Bill? ” publication: http: //www. washingtonlawhelp. org

Applying for Charity Care (Cont. ) • Have client apply for Charity Care directly to the hospital immediately • Can download application from hospital website or WA Dept of Health website: http: //www. doh. wa. gov/Dataand. Statistical. Re ports/Healthcarein. Washington/Hospitaland. P atient. Data/Hospital. Policies • Keep copy of application! • Add cover letter if necessary

Applying for Charity Care (Cont. ) • Dealing with variations in income • Bird-dog the application! • Troubleshooting problems (aka unnecessary barriers) • Need more time to submit application • Responding to hospital requests for more info Once Charity Care is approved, lawsuit should be dismissed What if there are other non-Charity Care-eligible medical bills in the same lawsuit?

Charity Care and Debt Collection Litigation • Scott Kinkley • Northwest Justice Project, Spokane • Charity care as defense in debt collection litigation, notice of charity care application, potential claims or counterclaims in individual cases under CAA/CPA and/or FDCPA if debt collectors violate charity care law or other laws in collecting medical debts

Other Issues • Wont Dismiss? Fee and cost shifting is tied to “prevailing party” judgment. • Charity care after judgment?

Charity Care May Apply Even After Judgment & Garnishment • Even after garnishment, if patient shows Charity Care eligibility, hospital must refund amounts in excess of amount owed. • “In the event that a responsible party pays a portion or all of the charges. . . and is subsequently found to have met the charity care criteria. . . payments in excess of the amount determined to be appropriate. . . shall be refunded” - WAC 246 -453 -020(11)

Obamacare and IRC 501(r) – New Statute & Regulations for Non-Profit Hospitals

What Risks Do 501(r) Regs Pose for Hospitals? For Debt Collectors? • Only applies to 501(c)(3) non-profit hospitals (excludes private and most public hospital district hospitals) • Hospitals can forward accounts for collections before 120 days from first post-discharge bill, but in that case, debt collector has duty to comply • Normal collection activities permitted during that time period but not ECAs (litigation, credit reporting) • Under 501(r) regulations, hospitals are accountable for actions of debt collectors • Debt collector may be directly liable and their violations could also jeopardize hospital’s 501(c)(3) status

Using Charity Care in Affirmative Litigation • By Matt Geyman • Columbia Legal Services, Seattle

No Private Right of Action • Legal Grounds for Claims: • Consumer Protection/UDAP • Breach of Contract/Duty of Good Faith & Fair Dealing • Unjust Enrichment

Affirmative Litigation Claims

Affirmative Litigation Lopez v. Yakima Regional Med. Ctr. • Hospital may not demand deposits from indigent patients before providing care. • Hospital must affirmatively screen patients for charity care “at or near the time of admission” and before demanding a deposit.

Affirmative Litigation Lopez v. Yakima Regional Med. Ctr.

Affirmative Litigation Lopez v. Yakima Regional Med. Ctr.

Affirmative Litigation Lopez v. Yakima Regional Med. Ctr. • Classwide violation of hospitals’ duty to provide charity care to “indigent patients • Hospital required to refund amounts collected in excess of amounts, if any, owed under Charity Care law and hospital’s own policy • Includes both principal and interest on hospital bills and also collection charges

Affirmative Litigation Amireh v. Northwest Hospital • RCW 70. 170. 060(6): “[H]ospital shall make every reasonable effort to determine. . . eligibility of the patient for charity care. . . [A]n initial determination. . . shall precede collection efforts directed at the patient. ” • WAC 246 -453 -020(1): “The initiation of collection efforts shall be precluded pending an initial determination. . . ”

Affirmative Litigation Amireh v. Northwest Hospital • “Hospitals should make every reasonable effort to reach initial and final determinations of charity care designation in a timely manner; however, hospitals shall make those designations at any time upon learning of facts or receiving documentation. . . ”

Affirmative Litigation Roberson v. Ray Klein, Inc. et al. • Core issue is unlawful charging of prejudgment interest from the date of hospital service, but most class members were also denied charity care

Affirmative Litigation Roberson v. Ray Klein, Inc. et al.

Affirmative Litigation Roberson v. Ray Klein, Inc. et al.

Charity Care Outreach • Tony Gonzalez • Columbia Legal Services, Wenatchee • Problem: so few patients, community members and social service providers know about charity care, especially in rural areas and immigrant communities • Outreach to tell community members and train service providers to get more patients into the charity care system

Brief Recap What have we learned? 1. People are being sued over medical debt! 2. What Charity Care is and how it works 3. Examples on how to defend against a collection lawsuit 4. Examples on how to use Charity Care in affirmative litigation 5. Finally, outreach

Why do Outreach?

Did the hospital offer to help? Common answers: 1. Apply for Insurance 2. Payment plans 3. The collection agency can help

Hospitals know the community

Resources • Northwest Justice Project • Debt Collection Defense Clinics • CLEAR Intake Line: 1 -888 -201 -1014 • https: //nwjustice. org/get-legal-help • Columbia Legal Services • Make an appointment: 206 -287 -9661 or 1 -509 -6620911, ext. 134 • www. columbialegal. org/fair-access-to-hospital-care • Washington Law Help • http: //www. washingtonlawhelp. org/ • NJP You. Tube Video on Charity Care • https: //www. youtube. com/watch? v=q. Nr. Xdl-b. PQ 4