EHF files suit against CHS over failing to meet charity care promises

From the Spokesman Review, by Becky Kramer

Deaconess and Valley hospitals’ for-profit owner failed to provide up to $110 million worth of charity care promised to low-income patients during its tenure in Spokane, according to a lawsuit filed Monday.

Empire Health Foundation filed the suit against Community Health Systems of Tennessee, one of the nation’s larger for-profit hospital chains, which purchased Deaconess and Valley hospitals in 2008.

As part of the purchase, Community Health Systems agreed to meet or exceed the average hospital charity care spending in Eastern Washington, the suit said.

But an analysis of the hospitals’ charity spending reports to the Washington Department of Health indicated that CHS fell at least $55 million short, the suit said. The litigation also accuses CHS of inflating the cost of the charity care it did provide, which could put the shortfall as high as $110 million.

CHS is on the verge of selling both hospitals and leaving the Spokane market.

Empire Health Foundation wanted to file the lawsuit before the sale of the two hospitals is finalized on June 30, said Antony Chiang, Empire Health Foundation president.

Chiang had strong words for CHS during an interview Monday: “You can’t just leave, go back to Tennessee and walk away with these unearned profits.”

In the Spokane area, the failure to provide $110 million worth of health care “had to have significant impacts” to the most vulnerable patients, Chiang said.

CHS officials in Tennessee did not immediately respond to a request for comment.

In Washington, people who earn less than 200 percent of the poverty level qualify for charity care. Under state law, hospitals cannot refuse to provide treatment based on ability to pay.

Empire Health Foundation’s mission is to improve the health of the region’s population. The foundation was formed with the proceeds of CHS’s purchase of the two hospitals.

Empire Health Foundation also was tasked with overseeing the contracts from the sale.

“Anecdotally, we’d heard that CHS was not meeting its commitments to charity care,” Chiang said. “There were persistent grumblings that ERs at Deaconess and Valley hospitals were seeing less charity cases and Providence ERs were seeing more.”

When MultiCare Health System of Tacoma announced its intent to purchase the two hospitals as part of a $425 million deal that also includes Rockwood Clinic, Empire Health hired a health care economist to research CHS’s charity care spending.

The suit was filed in U.S. District Court in Spokane. It won’t affect MultiCare’s purchase of Deaconess and Valley hospitals, which Empire Health Foundation supports.

MultiCare is a nonprofit health system with a good track record of providing charity care in the communities where it operates, said Gary Stokes, chairman of the Empire Health Foundation board and KSPS Public Television’s president and general manager.