Santa Clara Valley Healthcare patients can seek debt relief
Santa Clara Valley Medical Center in San Jose was part of a lawsuit settlement following allegations of billing needy patients for care they should have received for free. File photo.

    Tens of thousands of people treated at Santa Clara County-owned hospitals may now qualify to have their medical debt erased.

    This comes in the wake of a June lawsuit settlement that accused Santa Clara Valley Healthcare of charging needy patients for care they should have received for free.

    The county said yesterday it has begun notifying patients who should have been eligible for “charity care,” reduced-cost or free medical services for low-income people. Those who apply in the next several weeks could see their outstanding hospital bills voided, have court judgements corrected and even receive refund checks in the mail.

    The settlement is a major win for patient advocates like Helen Tran, a senior attorney with the Western Center on Law and Poverty who worked on the case.

    “It sends a really important message to hospitals statewide—that they should take their charity care obligations seriously,” she told San José Spotlight. “The county has done so.”

    All acute care hospitals in California must offer charity care to anyone uninsured, and many people with insurance, who earn below a certain threshold—currently 400% of the federal poverty level. That’s about $58,000 annually for an individual and $120,000 for a family of four. Patients must also be told about charity care options in their native language.

    Amid complaints that hospitals weren’t meeting these obligations, California Attorney General Rob Bonta issued a consumer alert last year prodding them to do more. But left uninformed, patients can be left believing they’re responsible for four- and five-figure hospital bills in full—and can face unnecessary calls from collections agencies and worse.

    Such was the case for the three patients named in a suit consumer advocates launched against Santa Clara County’s public hospital system in 2019.

    One patient in the suit was homeless, and incurred his medical debt when an ambulance took him to Santa Clara Valley Medical Center. Another was a Spanish-speaker who was never given any Spanish-language information about charity care. A third, a single mother of two and full-time student, should have qualified for free care, but was hit months later with a $34,000 hospital bill.

    The settlement affects the county’s entire public health system, including O’Connor and St. Louise hospitals.

    Fred Schwinn, an attorney with Consumer Law Center, initially took the case before Tran’s law center took over.

    “(County hospitals) never told people that this charity care was available. They never provided the notices that are required by law,” Schwinn told San José Spotlight. “People didn’t know about it, and therefore didn’t know to ask.”

    Since then, the county has taken steps of its own accord to increase access to charity care—what it calls one of the most “generous and innovative” bill payment programs in the country. In April 2020, the Santa Clara County Board of Supervisors created a new financial aid program that provides discounts on hospital bills for patients with incomes of up to 650% of the federal poverty level. That is roughly $94,770 annually for an individual and about $195,000 for a family of four.

    In tandem, the county’s “newly implemented outreach efforts, combined with our current programs, multilingual approaches, and recent state-initiated efforts, will allow us to better serve those most in need,” Paul Lorenz, CEO of Santa Clara Valley Healthcare, said in a statement.

    The county declined to comment further.

    Low-income patients whose bills went to collections between Oct. 28, 2018 and Dec. 31, 2021 are eligible to have their medical bills reviewed under the settlement, and will be receiving a letter notifying them of their status. Once patients are notified of eligibility, they have just 65 days to complete and return a form indicating they will apply for debt relief.

    Additional help completing the form is available through Health Consumer Access, a legal aid group.

    Patients who want to take advantage of the debt forgiveness must act quickly. Tran said legal advocates are “highly encouraging everyone who gets a letter to submit an application, if they think they even have a small chance of getting a refund.”

    Contact Graph Massara at [email protected].

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