Washington hospitals are looking to take their state’s Department of Health to court over a September notice requiring certain providers to offer charity care to poor patients regardless of where in the world they live.
In a complaint filed Monday, the Washington State Hospital Association (WSHA) petitioned the state court system to invalidate the new interpretation of a 34-year-old charity care law due to its inconsistency with other charity care policies and provisions adopted during the past few decades.
WSHA also warned that the new interpretation would require the state’s hospitals to provide “scarce, costly and complex medical care” to patients who “will likely come from around the world” as well as more common procedures to those in nearby states.
Without reimbursement, the requirement would harm Washington hospitals financially and “result in the exact opposite of the legislature’s intent” by decreasing access and increasing costs for state residents, the group wrote in its complaint.
“The opening lines of the law make it clear charity care is intended for the benefit of the people of Washington state: ‘The legislature finds that rising health care costs and access to health care services are of vital concern to the people of this state,’” WSHA CEO Cassie Sauer said in a statement.
“WSHA’s goal is the same as the law’s goal: to ensure the benefits of charity care are for the people of our state and that hospital resources are available to Washingtonians who need them. If charity care is needed by a patient in the community, they should be able to access the care without competing for space with other patients from other states and around the world,” Sauer said.
Washington’s Department of Health posted its Interpretive Statement (PDF) adjusting the charity care policy on Sept. 18. It cited amendments to the state’s Charity Care Act signed into law in March 2022 and highlighted “a small number of hospitals” with geographic-based charity care practices.
“Statutory eligibility for charity care … shall not be based, in whole or in part, on an indigent person’s residency,” the department wrote in its notice.
The Interpretive Statement requires certain larger hospitals to provide free or discounted care with a household income of up to 400% of the federal poverty level, while the remainder are obligated to do so for those with a household income of up to 300% the federal poverty level.
WSHA wrote in its complaint that the department separately notified “a number of Washington hospitals that it had erroneously approved policies with geographic restrictions, and demanded that they change their policies by January 16, 2024.”
Washington hospitals provided a collective $370 million in charity care services to patients during 2021, WSHA said. The organization also highlighted “significant financial losses” and resulting declines in service availability across these facilities in recent years—including $2.1 billion in statewide operational losses during 2022 and $750 million in operational losses across the first six months of 2023.
“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,” Sauer said. “Under the department’s interpretation, people living in Washington will subsidize charity care services to people from outside of the state.”
WSHA said it is seeking an opinion before the Jan. 16 deadline its members were given. Fierce Healthcare has reached out to the Washington Department of Health for comment on the policy and legal challenge.