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“Leave no money on the table”

MultiCare Health Systems’ Patient Collections Practices First in a series

“Leave no money on the table” MultiCare Health Systems’ Patient Collections Practices

FIRST IN A SERIES

Residents of Pierce and South King Counties depend on Multicare Health System (“Multicare”), one of the largest and most profitable healthcare systems in Washington, for everything from routine check-ups to lifesaving surgeries. When seeking care, they don’t have time to inquire into MultiCare’s billing policies or collections practices. They rely on MultiCare to stand by its commitment to its stated values of “respect,” “integrity,” “stewardship,” “excellence,” “collaboration,” and “kindness.” Unfortunately, this trust is often broken. This first report on MultiCare’s collections culture will examine MultiCare’s other aggressive collections practices –outside the overuse of medical service liens–and their impact on patients and the community. We will explore two particularly negative aspects of MultiCare’s collections focus: the introduction of a culture of patient collections into the patient medical treatment experience, and the imposition of unsustainable debt onto many of MultiCare’s patients. A later report will examine the medical service liens scandal itself, using court records not previously available to the public1 as well as a number of remarkably candid statements by the system’s executives in healthcare finance forums to explore MultiCare’s tangled and suspect relationships with its collection agency “vendors” and its own for-profit subsidiary.

Ten years ago, MultiCare earned a healthy but relatively modest “margin” of revenue over expenses of 5.6%.5 Sometime during the years that followed MultiCare executives began to pursue much larger profits, jumping to a 14.7% profit margin in 2012, and a staggering 15.7% margin in 2013.6 Even with a few years of lower performance, MultiCare averaged a 12.6% profit margin over the five years from 2009 to 2013.7 By comparison, the five year margins of other hospital systems in Washington range from 0.8% (PeaceHealth) to 6.8% (CHI-Franciscan Health System).8 These profit-levels might be more palatable if they had been reinvested in ways that led to significantly better health for MultiCare’s patient community. Unfortunately, Pierce County health indicators—which have long lagged behind the Washington state average—suggest otherwise.9 According to a recent report by the Robert Wood Johnson Foundation and the University of Wisconsin, Pierce County now ranks 25th among all 39 Washington counties for health outcomes, well behind the state’s other urban counties.

Selected 2014 County Health Rankings, Washington State

Indicators*

Pierce

King

Washington

Premature death

6,718

4,736

5,709

Poor or fair health

15%

10%

14%

$8,160

$7,571

$7,806

15%

10%

13%

Preventable hospital stays Health Care Costs

A Uniquely Profitable “Non-Profit” Health System MultiCare is the largest hospital system in Pierce County, with over 62% of the county’s community hospital beds.2 It has only one serious competitor, CHI-Franciscan Health, and together they account for 87.7% of the County’s inpatient healthcare market.3 As the county’s largest employer,4 it plays a vital role in the local economy. 2012 14.7% 3.8% -2.1% 3.2% 5.0%

2013 fit Margin 2009 - 2013 15.7% 12.6% 4.0% 4.2% 4.3% 0.8% 2.6% 4.1% 5.9% 6.8%

Profit Margins for Washington's Major Non-Profit Health Systems

Could not see doctor because of cost

*Premature death: Years of potential life lost before age 75 per 100,000 population; Poor or fair health: Percent of adults reporting fair or poor health; Preventable hospital stays: Hospitalization rate for ambulatory-care sensitive conditions per 1,000 Medicare enrollees; Health Care Costs: Price-adjusted Medicare spending per enrollee; Could not see doctor because of cost: Percent of adults who could not see a doctor in the past 12 months because of cost.

Rates of premature death, days of poor physical health, and preventable hospital stays in Pierce County are all worse than the state average, and are far worse than those in neighboring King County. More troubling in an area with very profitable health systems, health costs are significantly higher than the state average, and the percentage of residents who do not seek medical care because of costs is 50% higher than in King County. For many patients, MultiCare’s collections practices have magnified the impact of these costs.

Average Profit Margin (2009 - 2013)

MultiCare

A Focus on Collections

12.6% 13.0% 12.0%

Top MultiCare executives have made it clear for years that their goal was increasing profits. In 2011, Vincent Schmitz, the system’s longtime Chief Financial Officer, wrote “our aspirational goal… is to achieve at least $2 billion in annual net revenue.”11 The effort to boost profit has been multifaceted: MultiCare’s “sticker prices” for a number of common hospital procedures and services are among the highest in Washington State.12 In addition, litigation and disputes with its own front-line employees point to a hard-edged approach to staffing costs.13 In October 2014, recently-hired CEO Bill Robertson justified a new round of cost-cutting layoffs amid continuing record profits by asserting that “it’s out of [profit] margin that we get to do the things that our community wants.”14

11.0% 10.0% 9.0% 8.0%

CHI-Franciscan 6.8%

7.0% 6.0% 5.0%

Providence 4.2%

Virginia Mason 4.1%

4.0% 3.0%

PeaceHealth 0.8%

2.0% 1.0% 0.0%

Beyond these elements, however, MultiCare’s intense focus on patient debt collections has clearly been central to MultiCare’s pursuit of higher net revenue. As Jason Adams, Executive Vice President for Revenue Cycle and later President of MultiCare Consulting Services (“MCS”) 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.”15 Adams later testified

Profit Margin 2009 - 2013

“Leave no money on the table”: MultiCare Health Systems’ Patient Collections Practices

CARMELITA SWAIN Carmelita Swain served 17 years in the military as an army medic, including a 2012 deployment in Iraq and Afghanistan. She moved to Tacoma with her husband, mother and four children in August 2011 and soon after began using the Multicare hospitals. “My kids had to get x-rays because they’re in sports. They’re constantly hurting themselves.” After her two sons were x-rayed and diagnosed with knee and ankle sprains at Mary Bridge, Carmelita received a bill for $3,000. “I called them and let them know I have Tricare so that should be covered. Before I could even get off the phone the lady was telling me ‘if you don’t pay this today, we’re going to send you to collections, we’re going to put this on your credit report. ‘ It had only been 7 days since we received the care!” This was the first time Carmelita ever experienced so much difficulty settling a bill with her militaryprovided health insurance. “I’ve never had any issues like this before. We’ve been out of state, the kids have hurt themselves, my Tricare covered it and it was no big deal.” The bills are putting a strain on Carmelita’s family. “It’s pretty serious considering I’ve retired, so our income has gone down quite a bit. My husband works, but we are struggling to make it here. I suffer from PTSD so it’s stressful getting these phone calls all the time and having to constantly explain myself.” Still, she’s hopeful that Multicare will rectify the situation. “There has to be someone that oversees how this works. Because it doesn’t make sense that we’re getting ripped off on a daily basis.”

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.”16 Even with greater levels of insurance coverage under the Affordable Care Act, top MultiCare executives did not reduce their focus on collections. Diane Cecchettini, MHS 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 that’s a learning process, so we’re going to go after collection of bad debt. Because if service is provided, service needs to be paid for.”17

The MultiCare Collections System Responding to their incentives, MultiCare executives have created a system of aggressive, often ruthless patient collections, pressing patients at their most vulnerable moments prior to receiving care and later garnishing their wages. This is in addition to MultiCare’s pursuit of deep pocketed third party payers through medical service liens and sale of patient debt on national markets, both of which will be discussed in a forthcoming report.

“POINT-OF-SERVICE” BILLING As a glowing industry journal article reported, “At MultiCare, leaders set an aggressive goal of bringing the system’s point-of-service (POS) cash collections to 2 percent of net revenue... Since setting the goal, MultiCare has achieved yearly improvements in its up-front collections, including close to a 5 percent boost in 2012. MultiCare VP of Revenue Cycle Bethany Sexton says that at Mary Bridge, [a children’s hospital] ‘we hold ourselves to a standard of performing like any for-profit organization.’”18 Presentations by MultiCare and its consulting subsidiary to other hospital systems emphasized the returns on “reinforcing patient expectations and behavior” by pressing for upfront payment of estimated charges, copays, deductibles, even at the patient’s bedside, all of which could “avoid the high cost of collections” after the patient has gone home.19

“Leave no money on the table”: MultiCare Health Systems’ Patient Collections Practices

MultiCare found that good “scripting” for collections staff was essential to avoiding these “costs” by collecting from patients up front at the point-of-service.20 One such “script” reads: “This is an estimate of your liability based on the information available from your insurance company. Additional amounts due may be billed to you after your insurance company receives and processes the claim. I can help you take care of that. How would you like to pay for that today - cash, check, or credit card?”21 In a 2010 article in AHC Media, MultiCare’s director of Customer Service admitted that “it can be a challenge to approach a patient who is in a patient bed.”22 In the words of one Allenmore Hospital patient access technician: “The whole thing makes me uncomfortable. This is a time when we should be focused on patient care.”23 In addition to “scripting” these interactions in advance, managers emphasized tracking admitting staff performance for collections, and providing incentives for higher cash collections at the point of service.24 MultiCare patient access staff describe employee evaluations that rise or fall based on their collections rates.25 Bringing such pressure to collect into medical care settings can lead to shocking incidents: In one case, a patient was already under sedation, beginning a critical cardiac procedure, when asked to produce his credit card to pay the estimated costs.26

MULTICARE PATIENTS ON THE “GARNISHMENT TREADMILL” Many patients report harassing phone calls and threats to be turned over to collections agencies. A very large number, including dozens of the system’s own employees,27 are sued for these debts and have their wages or bank accounts repeatedly garnished. These patients often find themselves trapped on a “garnishment treadmill,” on which “attorney’s fees, interest and costs can offset the garnishments, leading to a perpetual cycle that ends in bankruptcy or destitution.” 28 ProPublica’s recent national expose of hospital systems’ legal pursuit of patients for medical debt stressed the burden

AGGRESSIVE POINT-OF-SERVICE COLLECTIONS Betty Robertson has worked as a surgical technologist at Tacoma General Hospital for 35 years. In 2011, her husband checked into Multicare’s Good Samaritan Hospital with heart issues. “He came in with an irregular heartbeat. My sister-in-law brought him in to the emergency room and I flew over from work.” Doctors began administering drugs and sedatives to Betty’s husband to prepare him to cardiovert and fibrillation that they hoped would return his heart rhythm to normal. “My sister-in-law and I were sitting with him as the medications were being drawn up to shock his heart back into normal rhythm. At that time in the ER there was another patient with two family members sharing the same room, with only a curtain separating us. It felt like there was no privacy whatsoever. A woman from Multicare comes in and starts asking my husband for money ‘Would you like to make that payment now?’” Betty told her to leave the room, but “my husband pulled his wallet out and he paid her while he was medicated. They checked to see if the deductible had been met so that they could try to collect payment at the time of service. This was done without consideration for the health issue that brought him to the emergency room in the first place, never checking to see what was going on in the room and what kind of treatment he was receiving at the time, only thinking of the money.” Betty was shocked. “You don’t ask for money from someone while they’re medicated because you can’t even sign a legal document when you have medications on board. Why on earth would you even consider asking for money in that type of situation? And in front of family and strangers a curtain away?” The invasiveness of Multicare’s payment request still bothers her. “Cardioverted like that, you may go into cardiac arrest. There are so many things that could go wrong. That’s a serious situation. To have something like that added to it is unnecessary stress. It’s not that woman’s fault, she’s just doing her job. It’s the process they have of pestering people to make the payment while they’re there that needs to change.”

“Leave no money on the table”: MultiCare Health Systems’ Patient Collections Practices

imposed on debtors by Missouri’s allowable medical debt interest rate of 9%.29 At 12%, the allowable interest rate on medical debt in Washington State is among the highest in the U.S.,30 and lawyers for the collection agencies add legal fees to patients’ debt at each instance of garnishment or renewal of judgment. Because these routine collections and garnishments are filed in the name of collection agencies rather than the health system, it is difficult to assess the scale of wage garnishment for MultiCare debt. One of MultiCare’s collection agencies for this work is Puget Sound Collections (“PSC”), identified by a former CFO as an important and valued “vendor.”31 Because PSC has many clients, and its collections cases in Washington’s Superior Courts alone number in the thousands each year (garnishment may also happen in District Court, where it is even harder to track), it is only possible to examine a sample of PSC’s legal work on MultiCare’s behalf. For this report we analyzed 100 randomly chosen PSC collections cases filed on MultiCare’s behalf in 2014 Superior Court records. The analysis shows that patients sued for MultiCare charges face an average of $3,400 dollars in interest and legal fees upon their first garnishment,32 in addition to the thousands they owed from their original bills. For most, these debts then mounted as wage garnishments were renewed a second, third or fourth time. Debtor’s legal fees and continuing interest charges sometimes accumulate faster than their garnished wages can pay down the debt, as shown below for debtor A.

Growth in Debt of Debtor A

Estimated Annual Medical Debt After Payment of Garnished Wages $290,901

$300,000

$259,733 $231,905

$250,000

$207,058 $184,873 $184,873

$200,000 $150,000

$140,583

$100,000 $50,000 Medical Debt

$0 Original Debt

2014

2015

2016

2017

Frances Bycraft is a student and stay-at-home mom who took her two-year old son to Mary Bridge for a wellchild checkup in December 2013. “We were having some developmental issues with him, so they decided to run some standard blood work to see if there was anemia. It turns out that he was pretty severely anemic. We had to go in for an initial blood draw and then another blood draw for checkup.” After the first three blood draws, the bill arrived. “It was $900. My boyfriend works for a largevolume company and we have their best insurance plan, a PPO. It was pretty shocking for us that we owed this much even after insurance because it was just the initial blood draws.” It wasn’t long before Multicare began pursuing Frances more aggressively. “I got that bill, and within two months, they put it into collections. They sent me a letter that was a final notice that said they were going to send it to collections. I was overwhelmed.” In the meantime, Frances had to take her son for additional testing and the charges were stacking up. “Within the time period between our first bill and that final notice, we were still going in for blood draws so our bill kept going up and up. By the time they actually put it into collections we were probably at $1,800 to $2,000.” Frances tried to explain to Multicare that she couldn’t afford her mounting bills. “I called them and said I have this bill, I probably can’t afford it, and they didn’t mention charity care to me.” After she was alerted to Multicare’s charity care policy by Washington Community Action Network, she was finally allowed to apply. “I called them while I was applying and said ‘look I have the application, I filled it out, I’m mailing it in, but it’s going to take a couple days, so I want to make sure nothing else gets pushed into collection. And

the lady said ‘I’m sorry but there’s nothing I can do for you. When we start putting bills into collection we’ve given people plenty of time to pay them.’ She basically told me it’s my fault. While I was applying, they pushed another bill in to collections.” After finally being accepted for charity care and paying off her reduced bills, Frances looked forward to receiving care for her son that she could afford. “We took my son in for another blood draw after we applied for financial aid and after I had paid all the bills, we were up to date. I just got another bill for the full price. They told me ‘Don’t pay anything, we’ll send you a bill that will be adjusted for financial aid.’ But they sent me a full priced bill. Now I have to follow up with Multicare again about the new bills and see why they’re not adjusting them with financial aid.” The financial and emotional strain of Frances’ ordeal has created a lot of stress for her family. “I’m a stay-at-home mom. My boyfriend works full time at a retail company. I’m a student too. I don’t bring in any money. I got laid off when I was pregnant. It’s stressful because I’ve had to waste so much time. This has been a horrible headache.”

2018

MultiCare billed “Debtor A” $140,583 for care received in a MultiCare facility. By the time PSC began garnishing Debtor A’s wages in 2014, he had accumulated over $44,290 in additional interest charges and legal fees. Even after paying almost one-quarter of his salary to Multicare every year, his debt was set to grow by more than $10,000 annually. 33

NAVIGATING MULTICARE’S CHARITY CARE LABYRINTH

“Leave no money on the table”: MultiCare Health Systems’ Patient Collections Practices

HOW LONG ON THE GARNISHMENT TREADMILL? Such debts often cloud patients’ lives for years. An analysis of a second random sample of fifty collections cases filed in 2010 by PSC on MultiCare’s behalf found twelve patients continued to have their wages garnished well into 2013, half of whom were still struggling with garnishment in 2014. Eight patients exited collections before 2013 by declaring bankruptcy, and another patient debtor declared bankruptcy in 2013. Overall, almost one in five sampled patients was forced into bankruptcy by Multicare medical debts.34 Additionally, three collections proceedings stopped when the PSC learned that the debtors had lost their jobs, and thus had no wages to garnish. Another patient moved and could not be found, while another escaped the garnishment treadmill through death. In sum, twenty-six percent of the 2010 MultiCare collection cases analyzed ended with the patient’s formal bankruptcy or effective impoverishment.

“Leave no money on the table”: MultiCare Health Systems’ Patient Collections Practices

SOLEDAD CAMACHO In 2012, Soledad Camacho worked as a relief manager at KFC A&W when an accident at home sent her to a Multicare emergency room with serious hand injuries. “They stitched it up at the emergency room and said I had to go in for surgery.” Soledad asked Multicare for financial assistance because she earned only $22,000 per year and was caring for her special needs daughter. “I asked them when I walked into the emergency room for the paperwork for charity care because I don’t have the money to pay for this. Everything’s expensive when somebody doesn’t have insurance. It’s really, really expensive.” Multicare put Soledad on a payment plan that, at first, appeared affordable. “They said that I had qualified to pay $100 per month. Me being naive, I said fine, I’ll pay the $100 per month. After almost a year, I got a summarized bill for what I still owed and called the people up because I was very upset. ‘You’re telling me this $30,000 bill that I owed is now $43,000!?’” Unable to afford even the interest, Soledad stopped making payments. Soonafter, Multicare began garnishing her wages at her new position at Allenmore Hospital working as a food service worker. “I started getting garnished in November 2014. They were taking 25% of my income, almost $300.” This has put a significant financial strain on Soledad’s family. “I’m struggling right now with getting groceries in the house. I can’t do Thanksgiving. I barely did Christmas.” With no hope of paying off the bill, Soledad considered filing for bankruptcy. “I wanted to file for bankruptcy, but I can’t even do that right now, because I couldn’t afford it. Once I get caught back up on my bills, I am filing for bankruptcy, because that bill’s going to be there forever.” The whole situation has left Soledad feeling down but hopeful. “Sometimes you want to give up. You don’t want to go to work... Maybe we should all get together and tell our stories. Maybe if they hear the people they might just do something about it.”

Of course, quantitative data on medical debt and bankruptcy cannot give a full picture of the lives of those who experience it. Letters included in some case records convey a sense of the anguish felt by those in the grip of medical debt collections. One woman wrote “After my daughter being diagnosed with cancer we were really financially devastated…. My take home pay of $1350.00 per month from the school district does not stretch far enough now to cover basic living expenses for my daughter and If you were to garnish my wages there would not be enough left for us to live on.” She concluded “I am embarrassed and so very sorry I would ask this debt be forgiven.” PSC did not forgive it however, and garnished family members’ wages on MultiCare’s behalf a total of eight more times.35 Another letter included in a collections file took an angrier tone, disputing that PSC had followed fair notification procedures or given the family a chance to defend itself. It ended nonetheless, with a wrenching description of collapsing family security under the weight of medical debt: “If PSC is allowed to garnish my wife’s wages we will not be able to pay rent… We have already lost our house, now they are looking to take away our place to live. This will affect not only us but my son and granddaughter (she lives with us part time) and my mother in law who I take care of at our home.”36 These kinds of harmful effects from high levels of medical debt are well-known. In addition to damaging patients’ ability to secure credit in the future, medical debt has an immediate impact on housing security and access to further medical care. In one survey, over one-quarter of those with medical debt reported housing problems such as the inability to qualify for a mortgage, to make mortgage or rent payments, or to secure or maintain a home.37 In another study, medical debt caused one-half of households with debt to skip treatment, not fill a prescription, or not see a doctor when necessary.38

“Leave no money on the table”: MultiCare Health Systems’ Patient Collections Practices

CONCLUSION

With final settlement of the class action lawsuit brought against it by patients over use of medical service liens, MultiCare’s leaders may hope to have “put to rest all controversy” over its approach to patient debt.39 However, MultiCare’s aggressive patient debt collection efforts extend well beyond the disputed liens, to include traumatic point of service billing, and ongoing onerous wage garnishment proceedings against patients. A later report will show that a broader and deeper look at the liens scandal itself, and at MultiCare’s tangled and suspect relationships with its collection agency “vendors” and its own for-profit subsidiary, reveals much about MultiCare’s corporate culture of profits, and raises questions as to whether this important institution deserves the confidence of the communities it serves. MultiCare is extraordinarily profitable, and can well afford to be more generous, or at least more lenient with its patientdebtors. MultiCare’s defenders may respond that MultiCare’s new financial assistance policy and new federal regulations are already addressing this problem. It is true that new IRS rules for non-profit hospitals issued in the last week of 2014 require these institutions to amply publicize financial assistance programs for low income patients, and to give them at least 120 days after first billing to apply for assistance before undertaking “extraordinary collection activities,” such as referral to collection agencies like Puget Sound Collections. Anticipating the new rules (which had been circulated in draft form for two years), MultiCare established a new financial assistance policy in August 2014, that equals and in some cases exceeds the federal requirement. While it is commendable that MultiCare took these steps, several observations are in order: • The new financial assistance policies do not address the system of incentives that reward higher collections rates, particularly the inappropriate lengths to which point-of-service collections have been carried. • The number of patients who receive MultiCare financial assistance (also known as “charity care”) is declining as the Affordable Care Act shrinks the number of uninsured. It is much easier to expand financial assistance eligibility when there are half as many self-pay patients (assuming tight correlation between payments and patients) as they move onto government insurance.40 • Extending deadlines for application for financial assistance does not help those who still bear the burden of high interest rates on medical debts incurred earlier. Many patients remain in the collections process for years, with interest and legal fees accumulating faster than they can repay the debt. The case of Sears employee A. T. provides a poignant example: When PSC took him to court on MultiCare’s behalf in December 2010 he had bills from MultiCare totaling $28,000 and owed over $4,000 in additional interest and legal fees. Despite regular garnishments of his wages, his debt in December of 2014 had climbed to $44,735.76.41 For patients like A.T. the only options are life on the treadmill of debt or declaring bankruptcy. Unpaid medical bills are the cause of over 60% of US personal bankruptcies, and have effects that ripple across communities and persist over long periods of time.42 • Finally, the interest rates and legal fees incurred by patients sent to collections for MultiCare charges, while legal under Washington State law, are unconscionably high—above those prevailing in many states. MultiCare acknowledges that it is “ultimately responsible for the conduct of our vendors and employees.”43 It could voluntarily accept a lower rate of interest, and instruct its collections vendors to do the same.

RECOMMENDATIONS Oversight: MultiCare’s patient collections activities and vendors should be overseen by an independent, communitybased committee with the power to make changes in collections protocols and respond to complaints about billing, vendor activities and collections practices.

Interest Reduction: medical debts.44

MultiCare should review and reduce the interest rates it and its collections vendors add to

Retroactive Financial Assistance: MultiCare and its collections vendors should retroactively offer Financial Assistance, to all patients in collections, including those whose accounts predate the system’s August 2014 financial assistance policy revision by more than the 240 day period allowed for in the new policy. Under Washington law, patient debtors are subject to legal garnishment for up to six years after their initial bill, and retroactive financial assistance should be available that long as well. “Leave no money on the table”: MultiCare Health Systems’ Patient Collections Practices

NOTES

29 Paul Kiel and Chris Arnold“From the E.R. to the Courtroom: How Nonprofit Hospitals Are Seizing Patients’ Wages” December 19, 2014, retrieved from www.propublica.org/article/how-nonprofit-hospitals-are-seizing-patients-wages

30 “Summary of maximum permissible rates under state usury laws” American Lawyers Quarterly retrieved from www.alqlist.com/ interestratesummary.

A number of depositions and exhibits that are not included in the docket records of Walker et al v Hunter Donaldson et al, Pierce County Superior Court 13-2-08746-0 and Miesmer v Hunter Donaldson et al, Pierce County Superior Court 13-2-12653-8, including the complete depositions of Jason L. Adams and Vincent Schmitz were made available for this report. See also the many illuminating articles by and about MultiCare Revenue Cycle policies in the journal of Healthcare Financial Management,

“Community hospital” as defined by the Washington State Department of Health. Quarterly Hospital Financial Data for 4Q 2014, Hospital and Patient Data Section, Department of Health, State of Washington.

Washington Health Care Facilities Authority Revenue Bonds New Issue Series 2012A (Multicare Health System), p A-13

http://www.multicare.org/multicare-facts/

Consolidated Financial Statements, MultiCare Health System, 2003 and 2004

Measured as ‘excess of revenues over expenses’/ ‘Total unrestricted revenues, gains, and other support’ Consolidated Financial Statements, MultiCare Health System, December 31, 2013 and 2012.

Consolidated Financial Statements, Multicare Health System, 2009 - 2013.

IRS Form 990 for Franciscan Health System, FY 2011 (July 2011-June 2012) ,

“Healthcare for Pierce County: we can do better, Fall Summit” Washington Dept of Health, October 22nd, 2007.

10 County Health Rankings database, Robert Wood Johnson Foundation and University of Wisconsin, retrieved from www.countyhealthrankings.org/

31 Deposition of Vincent H. Schmitz, Miesmer v. Hunter Donaldson, LLC et al., No. 13-2-12653-8, Superior Court of the State of Washington in and for the County of Pierce, November 22, 2013. 32 Average garnishment amount including interest and fees = $10,709, Average original claim = $7,308.

Source: UFCW 21 analysis of 100 Puget Sound Collections garnishments filed in Pierce County Superior Court on behalf of MultiCare, MultiCare Medical Associates, Good Samaritan, and other MultiCare affiliated groups. Data includes the first 92 PSC cases, sorted by last name, which include a complaint listing a MultiCare affiliated creditor. Excludes 8 cases where the list of creditors included both MultiCare-affiliated and non-MultiCare creditors.

33 PSC Inc v ______, No. 14-2-06793-9, Superior Court of the State of Washington in and for the County of Pierce, March 11, 2014. (name of defendant omitted for privacy) 34 Source: UFCW 21 analysis of 50 Puget Sound Collections garnishments filed in Pierce County Superior Court during 2010 on behalf of MultiCare, MultiCare Medical Associates, Good Samaritan, and other MultiCare affiliated groups. Data includes the first 50 PSC cases, sorted by first name, which include a complaint listing a MultiCare affiliated creditor 35 PSC Inc v ______, No. 10-2-06815-1, Superior Court of the State of Washington in and for the County of Pierce, February 24, 2010. (name of defendant omitted for privacy).

11 Vincent Schmitz “A capital strategy that can weather tough times” Healthcare Financial Management, September 2011.

36 PSC Inc v ______, No. 10-2-08298-6, Superior Court of the State of Washington in and for the County of Pierce, April 13, 2010. (name of defendant omitted for privacy).

12 Washington Health Alliance “Hospital Sticker Shock: a report on hospital price variation in Washington state” 2014. retrieved from wahealthalliance.org/alliance-reports-websites/alliance-reports/.

37 Robert Seifert “Home Sick: How Medical Debt Undermines Housing Security” The Access Project, 2005; retrieved from www.accessproject.org/new/pages/pubMedical.php

13 Settlement Agreement, WSNA and MultiCare Health System, September 12, 2013, retrieved from www.wsna.org/Local-Unit/ Store/37/Settlement%20Agreement.pdf

38 Amy Traub and Catherine Ruetschlin “The Plastic Safety Net” Demos, 2012; retrieved from www.demos.com.

14 “Q&A: MultiCare CEO Bill Robertson faces the challenge of change” The News Tribune (Tacoma) November 9, 2014; “Amid record profits, MultiCare plans cuts” ” The News Tribune (Tacoma) November 9, 2014. 15 MA Now Healthcare June, 2010, www.mossadams.com/mossadams//Documents/Publications/_zine_June2010.pdf 16 Deposition of Jason Adams; Velma Walker, et al., v. Hunter Donaldson, LLC et al, No. CV-14-210, Superior Court Cumberland State of Maine, May 12, 2014. 17 “MultiCare CEO gets real about what the ACA Means to her: uncertainty” Puget Sound Business Journal, November 18, 2013. Court records reveal that Cecchettini remained on the MHS payroll as “CEO advisor” at full salary for months after her resignation as CEO. Deposition of Diane E. Cecchettini, Velma Walker v. Hunter Donaldson, LLC et al., No . 13-2-08746-0, Superior Court of the State of Washington in and for the County of Pierce, June 5, 2014 18 Overcoming 4 common revenue cycle benchmarking myths, Healthcare Financial Management, July 2013. 19 “Trends in POS cash collections” Multicare Consulting Services presentation to Oregon HFMA, February 18, 2011, www.oregonhfma.org/files/42737285.ppt 20 “Trends in POS cash collections” Multicare Consulting Services presentation to Oregon HFMA, February 18, 2011, www.oregonhfma.org/files/42737285.ppt 21 “Point of Service Collection Scripts” www.hfma.org/Content.aspx?id=14120

39 Class Action Settlement Agreement , Velma Walker v. Hunter Donaldson, LLC et al., No . 13-2-08746-0, Superior Court of the State of Washington in and for the County of Pierce, November 17, 2014 40 Consolidated Financial Statements (unaudited) MultiCare Health System, 2014. “Charity care allowances, as a percent of gross patient service charges, decreased to 1.6% for the year ended December 31, 2014 compared to 3.4% in 2013 primarily due to the reduction in self-pay volumes, which was associated with the Medicaid expansion in Washington State.” The CFS shows that the percentage of gross charges (before the bill is negotiated down by insurers, government, etc...) earned from self-pay patients fell from 5.5% in 2013 to only 1.9% in 2014, while the share of payments from Medicaid rose from 21.4% of total gross revenue to 27.0% in just one year. 41 PSC Inc v ______, No. 10-2-16404-4 , Superior Court of the State of Washington in and for the County of Pierce . Name of defendant omitted here for privacy. 42 Karen Pollitz, Cynthia Cox, Kevin Lucia, and Katie Keith “Medical debt among people with health insurance” Kaiser Family Foundation report, January, 2014. Retrieved from: http://kff.org/report-section/medical-debt-among-people-with-healthinsurance-consequences-of-medical-debt/ 43 Untitled statement from MultiCare Health System, November 17the, 2014. 44 Many states limit the interest that can be charged on medical debt (beyond more general “usury”l interest caps), but Washington is not among them. Families USA, “Medical Debt: What States Are Doing to Protect Consumers” 2009, www.familiesusa.org/ assets/pdfs/medical-debt-state-protections.pdf

22 “Are patients angry at access? Make sure they’re happy before they leave” AHC Media, February 1. 2010. www.ahcmedia.com/ articles/print/17413-are-patients-angry-at-access-make-sure-they-re.. 23 Interview with Bev Willoughby, March 19, 2015. 24 “Trends in POS cash collections” Multicare Consulting Services presentation to Oregon HFMA, February 18, 2011, www.oregonhfma.org/files/42737285.pp 25 Interview with Bev Willoughby, March 19, 2015. 26 Interview with Betty Robertson. March 6, 2015. 27 Information provided by MultiCare Health System 28 Adam Mayle and Stanley Corbit “Putting the Brakes on Washington’s Garnishment Treadmill” retrieved from www.wsba.org// media/Files/LegalCommunity/Sections/Antitrust/PuttingtheBrakesonWashingtonsTreadmill

“Leave no money on the table”: MultiCare Health Systems’ Patient Collections Practices

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