Attorney General Bob Ferguson announced that the debt collection agency Harris & Harris will pay $1 million to settle a lawsuit. The settlement, worth $1 million, addressed allegations of unlawful medical debt collection from more than 160,000 residents of Washington. The agency was accused of failing to inform patients of their rights regarding medical debt, a crucial aspect of the state’s consumer protection laws. This case is a key element of Ferguson’s ongoing initiative to enforce consumer protections, particularly in the healthcare sector.
The origins of this lawsuit can be traced back to the practices of Harris & Harris, which, along with Optimum Outcomes, was employed by Providence Health & Services to collect medical debts. The methods used by these agencies came under scrutiny for possibly violating Washington state laws related to medical debt collection. The lawsuit, expanded in the summer of 2022 to include these agencies, alleged that they did not provide patients with essential information about their debts. Specifically, they failed to inform patients about their right to request detailed information about their debts and did not provide necessary contact information for the hospitals where the care was received.
Emphasizing the importance of transparency and legal compliance in debt collection, Attorney General Ferguson stated, “Debt collectors must play by the rules. 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. We will continue to enforce these protections on medical debt.”
This statement highlights the state’s dedication to ensuring that consumers are not only aware of their rights but also that these rights are upheld by corporations, especially in areas as sensitive as healthcare.
In a related lawsuit, Providence Health & Services, the parent organization employing Harris & Harris, agreed to a settlement that included $157.8 million in refunds and debt forgiveness. This resolution significantly impacted nearly 100,000 patients, offering substantial benefits to low-income individuals who likely qualified for free or reduced-cost hospital care.
Investigations into Harris & Harris’s practices by the Attorney General’s Office (AGO) revealed that the agency sent over 294,652 first written collection notices to 166,872 Washingtonians without the required disclosures. This oversight led to the collection of nearly $25 million from patients, often without their knowledge of potential financial assistance or their legal rights.
The settlement with Harris & Harris mandates a change in the agency’s business practices. The company must include all legally required disclosures in future collection notices and fund consumer education for affected individuals in Washington. This education aims to inform them about their rights regarding medical debt collection and the process of applying for financial assistance for hospital bills.
Attorney General Ferguson’s Health Care Initiative, which encompasses this lawsuit, has yielded over $205 million in debt forgiveness and refunds for Washington residents. This initiative showcases the government’s commitment to protecting consumers from unfair and deceptive practices in the healthcare sector.
The impact of this case is amplified by a new law enacted in March 2022 and effective from July 1, 2022. This law expands eligibility for financial assistance in Washington, potentially benefiting half of the state’s population with access to free or reduced-cost hospital care. It requires hospitals to provide clear notices about financial assistance, screen patients for eligibility, and suspend collection activities if a patient appears eligible for assistance.
While the case against Harris & Harris has been settled, the legal battle against Optimum Outcomes continues, with a trial scheduled for February 22. This ongoing lawsuit signifies the state’s resolve to address all aspects of issues surrounding medical debt collection.
According to the AGO, the settlement with Harris & Harris is a crucial step in Washington State’s efforts to safeguard consumer rights, particularly in healthcare. It brings immediate relief and education to thousands of individuals affected by unfair debt collection practices and sets a precedent for ethical and legal medical debt collection.