The victim of a bus accident in Montesano in 2013 has filed a lawsuit against Grays Harbor Community Hospital and several individuals associated with a collections company over the use of medical liens to recover costs associated with treating her. And her attorneys have asked for “class action” status, meaning people in similar circumstances could join the suit.
The case, filed in Grays Harbor Superior Court on Tuesday, focuses on the practices of California-based collections company Hunter Donaldson, which was recently at the center of a legal battle involving Multicare Health System, based in Tacoma.
In the Multicare suit, Hunter Donaldson was accused of improperly filing medical liens, using a notary public who was improperly certified in the state of Washington. In addition, a Multicare executive was accused of helping the Hunter Donaldson employee fraudulently obtain notary certification in the state, even though she lived and worked in California. Liens, which must be filed with the county, are required to be notarized.
After a legal battle that lasted well over a year, Multicare agreed to settle the class-action suit for $7.5 million in late 2014, but admitted no wrongdoing. During the legal battle with Multicare, Hunter Donaldson filed for bankruptcy protection. More than 4,000 patients were potentially eligible to benefit from the settlement in that case, according to the law firm that represented the plaintiffs.
The Tacoma News Tribune reported that the executive accused in the suit left Multicare, and the state rescinded the Hunter Donaldson employee’s notary certification.
Grays Harbor Community Hospital formed an “affiliation network” with Multicare in mid-2013, around the same time the case against Hunter Donaldson and Multicare began.
The most recent lawsuit accuses Hunter Donaldson and Grays Harbor Community Hospital of the same improper actions regarding medical liens. In fact, the same woman whose notary certification was rescinded during the Multicare lawsuit is also named as a defendant in the Grays Harbor lawsuit. The Grays Harbor complaint also requests class action status.
If granted, that could mean any patient subjected to a medical lien filed by agents of Hunter Donaldson in Grays Harbor County could become a party to the suit, according to Darrell Cochran, managing partner at Pfau Cochran Vertetis Amala PLLC and lead council representing the accident victim in this case, Mary Bryan.
Through medical liens, state law allows medical providers to seek up to 25 percent of insurance settlements paid to accident victims to cover the cost of their services. For providers, the alternative is to bill medical insurance companies that, through agreements with providers, may pay less than 100 percent of the bill.
Up until the last few years, the medical lien process had mostly been used by “medical professionals on the periphery,” Cochran told The Daily World on Thursday.
He asserted that, for larger hospitals, “the liens have been used in the last couple of years to increase profits.”
“They can dodge the health insurance and get, instead of a 60 or 50 percent reimbursement (on medical services costs), they can get more like 100 percent reimbursement from a crash victim’s settlement,” he said.
Grays Harbor Community Hospital CEO Tom Jensen had not seen the lawsuit as of Friday morning, but said that the hospital began using Hunter Donaldson about six years ago under former CEO John Mitchell.
“We had an audit review done by Multicare in 2009,” Jensen said. “One of their recommendations was to use Hunter Donaldson.”
Mitchell signed a contract with Hunter Donaldson in November of that year, Jensen said.
“They said, ‘This has been a benefit to us as an organization, and it’s not against the law, and this is what we are doing,” he said.
Jensen said the hospital stopped sending patient accounts to Hunter Donaldson sometime in mid-2015, due to the company’s bankruptcy.
As for the practice of using medical liens in accident cases, Jensen pointed out that the use of medical liens themselves wasn’t the issue.
“I believe that it’s not against the law … it was how they were doing it (that was the problem),” he said referring to the Multicare lawsuit.
In Bryan’s case, she was treated at Grays Harbor Community Hospital after being hit by a school bus in Montesano in December of 2013, but, instead of billing her medical insurance, the lawsuit alleges the hospital turned her case over to Hunter Donaldson to file a medical lien to try to recoup its costs through her settlement from the Montesano School District’s insurance carrier.
In his client’s case, the law could potentially allow Grays Harbor and Hunter Donaldson to collect up to about $275,000 from Bryan, depending on her total medical bills. She settled with the Montesano School District’s insurance carrier for $1.1 million in August of 2015.
But, the lawsuit calls into question the legality of liens filed by Hunter Donaldson in Grays Harbor County, citing the same shortcomings as in the Multicare lawsuit.
Cochran was also the lead attorney in the Multicare case.
The lawsuit further calls into question the notary licenses of several Hunter Donaldson employees, including the one named in the previous lawsuit, and the company’s status as a legal claimant under state law, potentially making all liens it filed “invalid and fraudulent.” The lawsuit also claims Hunter Donaldson aggressively went after payment from patients using the liens as leverage.
In a press release, Cochran chastised the hospital for not heeding the Multicare lawsuit.
“Grays Harbor should have investigated its relationship with Hunter Donaldson right then and there and taken steps to protect its patients,” he wrote.