A judge in Washington has ordered a collection agency that was sued by the state Attorney General to pay $1.2 million in fees and fines after being found to have violated the state’s Consumer Protection Act when it collected payments from patients without providing them information about the existence of financial assistance programs.
The Background: Two agencies — Harris & Harris and Optimum Outcomes — were sued back in 2022 for allegedly violating Washington’s Collection Agency Act and Consumer Protection Act as part of a crackdown against one of the state’s largest healthcare providers and what the AG described as collection tactics that were too aggressive.
- Harris & Harris reached a settlement with the Washington AG’s office last month, agreeing to pay $1 million in fined.
- Optimum opted to take the case to trial.
- The healthcare provider — Providence Health & Services — last month reached a settlement of its own where it will provide $158 million in refunds and debt forgiveness to patients who likely qualified for reduced-cost or free healthcare based on their income levels.
The Ruling: The judge ruled that Optimum Outcomes violated state law more than 82,000 times — once for each of the 82,729 collection notices it sent to individuals that did not include information about financial assistance programs, which is a required disclosure under state law.
- The judge fined the company $10 for each violation, for a total penalty of $827,290. The judge also ruled that the collection agency must reimburse the state for the costs of its investigation, which are estimated to be $400,000. The company must also make changes to its collection processes to ensure it is in compliance with state law.
- The company collected $3.3 million as a result of the 82,729 letters that were sent, and earned a commission of $376,000 from the client for its work, according to court documents.
The Last Word: “This legal victory resolves the largest charity care lawsuit in American history,” said Washington AG Bob Ferguson in a statement. “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.”
