MultiCare Health Systems, a Tacoma, Wash.-based nonprofit, is the subject of a new report citing questionable billing practices and collection methods that leave some patients in endless cycles of debt.
The report from nonprofit community organization Washington Community Action Network (Washington CAN) focuses on point-of-service billing involving a hospital employee allegedly approaching patients before their visit ends - at times while still in a hospital bed - to collect payments. MultiCare also allegedly provided incentives for higher cash collections at the point of service, according to the report.
From the Washington CAN report:
... MultiCares intense focus on patient debt collections has clearly been central to MultiCares pursuit of higher net revenue. As Jason Adams, executive vice president for Revenue Cycle and later president of MultiCare Consulting Services put it: "... hospitals must zero in on their processes so they can collect every dollar owed to them - in other words, leave no money on the table.
Adams later testified that MultiCare executives compensation is tied to the totals leveraged from patient accounts: "Every executive at MultiCare had a performance-based incentive that was directly tied to the operating performance of the company, so if any initiative were to increase revenue and increase
the margin of a target the board set, we were handsomely rewarded .... The greater the collections ... The more the benefit to MultiCare.
Even with greater levels of insurance coverage under the Affordable Care Act, top MultiCare executives did not reduce their focus on collections.
Diane Cecchettini, MultiCare's CEO from 1999 until May 2014, told the Puget Sound Business Journal: "Because people will look at the premium rate [when shopping for health insurance] and then not look at the design of the plan, I think thats a learning process, so were going to go after collection of bad debt. Because if service is provided, service needs to be paid for."
Washington CAN found that MultiCare had a profit margin of 15.7% in 2013 and an average profit margin of 12.6% from 2009 to 2013. That's substantial compared to other hospitals in Washington state, where margins range between 0.8% and 6.8%, according to the report.
Allegations of problematic billing practices come not long after MultiCare settled a class action lawsuit for $7.5 million last fall over MultiCares third-party vendors issuing medical liens. The lawsuit over those medical liens also alleged aggressive collection practices.
MultiCare is the largest private employer in Pierce County, Wash.