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WA hospitals sue state Department of Health over expanded charity care requirements

Mixed race nurse walking in hospital
JGI/Tom Grill/Blend Images/Getty Images/Tetra images RF
Tetra images RF
Washington hospitals are challenging new state charity care rules.

The association representing most of Washington’s hospitals sued the state Department of Health this week over the department’s new policy that says hospitals should provide non-emergency charity care to out-of-state residents.

Washington’s charity care law has long required hospitals to provide emergency care regardless of residence or immigration status and non-emergency care to residents of Washington state who don’t have insurance and can’t afford to pay.

Hospitals say the new requirements could leave them facing significant financial losses, while also making care harder to access for Washington residents. The state Department of Health last month changed their interpretation of the charity care law to require Washington hospitals to provide care for any service to anyone, regardless of residency. Hospitals have until Jan. 16 to update their policies.

The Washington State Hospital Association on Monday filed a lawsuit in Thurston County Superior Court against the department, claiming the decision “dramatically departs” from 30 years of established practice.

“The new approach would make Washington state a medical tourism destination,” said Taya Briley, executive vice president and general counsel for the hospital association.

The state’s charity care law, first established in 1989, requires mid-size and large hospitals to provide free and discounted care based on income levels.

It applies to those with incomes up to 400% of the federal poverty level, which is about $58,000 for an individual and $120,000 for a family of four. Smaller hospitals can provide charity care to people with incomes up to 300% of the federal poverty level, about $43,000 for an individual and $90,000 for a family of four, according to the hospital association.

In their Sept. 18 statement changing the interpretation of the law, the Department of Health said further review of state laws surrounding charity care show that the legislative intent is to require hospitals to provide charity care and determine eligibility based on the income of patients, not on whether they are Washington residents.

The department said a small number of hospitals had restricted charity care to only patients who reside within the geographic region of the hospital.

Briley said many hospitals with geographic limits for charity care tend to be centers with specialty care that might be difficult to find or more expensive in another state, such as cancer treatment or organ transplants.

In their lawsuit, the hospital association said the Department of Health has regularly approved hospitals’ policies that allowed them to limit charity care for residents only.

Frank Ameduri, Department of Health spokesman, said the department cannot comment on pending legal action but that it was monitoring the lawsuit.

“The agency is tasked with supporting the charity care statutes, and ensuring patients who meet the program’s criteria have access to care regardless of their financial standing,” he wrote in an email. “The department’s mission is to support the health and well-being of patients.”

Briley said Wednesday that the hospital association supports the state’s charity law and is fully committed to offering charity care for emergencies to anyone who needs it, but opening up non-emergency services to anyone could result in resources being stretched too thin.

Many hospitals do provide these charity care services to out-of-state residents if they have the resources, she said, but those that do not have the resources may now be forced to come up with them.

“That is really going to open up Washington hospitals to unsustainable financial losses,” Briley said.

The change in the law’s interpretation comes at a time when Washington’s hospitals are already struggling financially. In recent years, the hospital association has made repeated calls to the Legislature for more funding for staff and infrastructure as the COVID-19 pandemic left many of the facilities in debt. Washington hospitals in 2022 had $2.1 billion in operational losses, according to the lawsuit.

In 2021, the association estimates that hospitals statewide provided $370 million of charity care services, a cost that hospitals end up absorbing.

“There is no such thing as free care. Nurses, physicians, pharmacists, housekeepers and other staff who care for charity care patients still must be paid,” hospital association CEO Cassie Sauer said. “Under the department’s interpretation, people living in Washington will subsidize charity care services to people from outside of the state.”

Washington State Standard is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Washington State Standard maintains editorial independence. Contact Editor Bill Lucia for questions: Follow Washington State Standard on Facebook and Twitter.