Hospitals sue state to block new rules requiring charity care coverage for out-of-state residents

The Washington State Hospital Association filed a lawsuit Monday against the state Department of Health over a proposed rule allowing out-of-state patients to receive charity care, arguing that such a policy would alienate Washingtonians. Medical care is more difficult to access and more expensive.

“It requires hospitals to provide free or discounted care to anyone from anywhere. The new approach will transform Washington State into a medical tourism destination,” Taya Briley, an attorney for the association, said in a statement.

First enacted in 1989, Washington State’s charity care law requires hospitals to provide financial assistance to patients within 300% of the federal poverty level for medical bills. pay at their own expense. That creates an upper limit of $43,000 a year for an individual and a limit of $90,000 or less for a family of four. People within 400% of the poverty level are eligible for some hospitals.

Four million Washingtonians are eligible for free or discounted hospital care under an expanded charity care program passed by the Legislature last year.

“About half of Washingtonians are eligible for free or reduced-cost care in Washington state hospitals,” the Attorney General’s office noted last year when it launched the expanded program. “These protections apply to out-of-pocket hospital expenses, including copays and deductibles, regardless of insurance status. Washington law currently provides the strongest protections in the country for out-of-pocket hospital costs.”

On behalf of its member hospitals, the hospital association objected to the Department of Health’s interpretation of the updated law, which expanded benefits to patients who live out of state but are being treated in Washington.

“The use of geographic boundaries to determine charity care eligibility is not supported under current law,” the Department of Health determined last month.

“Hospitals may not adopt policies that exclude patients from qualifying for charity care if they are income eligible,” the department wrote. It stated that a “small number” of hospitals limited eligibility to people within geographic boundaries or entire states or smaller boundaries such as counties or hospital ZIP codes. .

The Department of Health requires any hospital that violates its interpretation of the law to amend its charity care policy to comply by January 16, 2024.

Instead of complying with administrative regulations, hospitals across the state sued.

“The Department’s new (and erroneous) interpretation of the Act would result in the exact opposite of what the Legislature intended when it enacted the Charity Care Act: By requiring hospitals to Washington provides free or discounted care to poor people from every corner of the world, the Department will reduce access for Washingtonians and will increase the cost of care for Washingtonians, who will inevitably subsidizes the cost of free care for others located outside the State,” said the lawsuit filed in Thurston County Superior Court on Monday.

A spokesperson for the Department of Health declined to comment on the lawsuit but provided a statement about the agency’s responsibility for the charity care program.

“The agency is tasked with supporting charity care regulations and ensuring patients who meet the program’s criteria can access care regardless of their financial status . The ministry’s mission is to support the health and well-being of patients,” the Ministry of Health statement said.

According to the hospital association, increased costs based on administrative regulations will be passed on to patients in the state who must pay for hospital stays.

“There is no such thing as free care. Nurses, doctors, pharmacists, housekeepers and other employees who provide care to charity patients must still be paid, Cassie Sauer, CEO of the hospital association, said in a statement. “According to the department’s interpretation, people living in Washington will subsidize charity care services for out-of-state people.”

Washington hospitals provided $370 million worth of free or discounted medical care in 2021 through charity care policies.