Medical Debt Collection Company Violated Consumers’ Rights, Ordered to Pay $800K 

By Consumers for Quality Care, on April 3, 2024

Washington state recently scored a huge victory against a medical-debt collection company, which must now pay more than $800,000 for violating the patients’ rights against unfair collection practices, according to NBC Right Now. 

This case wraps up Washington Attorney General Bob Ferguson’s investigation and lawsuit against the Providence hospital system. Back in 2022, The New York Times reported that Providence trained staff to aggressively pursue payments from financially strapped patients and also instructed employees not to accept refusals from patients struggling to pay. 

The medical-debt collection company, Optimum Outcomes, worked with Providence to engage in predatory debt-collection practices. Optimum was found to have neglected state laws requiring debt-collection companies to inform consumers that they may be eligible for financial assistance. Optimum also failed disclose the rights that consumers with medical debt have in these situations. In total, more than 82,000 Washingtonians who may have been eligible for financial assistance had their medical debts sent to collections anyway. Under the settlement, these patients will be made whole and will receive refunds or have their debt wiped away.  

This ruling adds to the $158 million settlement to which Providence agreed earlier this year. “We delivered economic justice for Washingtonians in the form of corporate reforms and more than $160 million in direct payments, debt forgiveness and civil penalties,” said Attorney General Ferguson. 

CQC applauds the outcome of this settlement and urges lawmakers and regulators to take action to stop hospitals from using predatory medical-debt collection tactics that harm consumers and exacerbate the nation’s pervasive medical-debt crisis.