They Were Entitled to Free Care. Hospitals Hounded Them to Pay.

Senior executives at Providence were frustrated. They were spending a lot of money on health care for patients. It was costing them money.

The executives came up with a program called Rev-up.

An investigation by the New York Times found that Providence employees used Rev-Up to wringing money out of low income patients.

According to training materials obtained by The Times, members of the hospital staff were told how to approach patients and try to get them to pay.

The materials said to always ask the patient. Employees were told to ask patients how they wanted to pay. It's part of your job to solicit money. That is not an option.

Debt collectors were sent to pursue patients who didn't pay.

Half of the nation's 5000 hospitals are nonprofits. Providence avoids more than a billion dollars in taxes. Free care for the poor is one of the services the Internal Revenue Service requires them to provide.

Many of the hospitals have become almost indistinguishable from for-profit companies because of their focus on the bottom line.

In order to understand the shift, The Times reviewed thousands of pages of court records, internal hospital financial records and memos, tax filings, and complaints filed with regulators, as well as interviewing dozens of patients, lawyers, current and former hospital executives, doctors, nurses and consultants.

The consequences have been dire. Many nonprofit hospitals were ill equipped for a large number of critically sick Covid-19 patients because they had been operating with skeleton staffs. The nonprofits that owned them focused on investments in rich communities at the expense of poorer ones, so others lacked intensive care units.

Providence shows that some hospital systems have reduced their emphasis on providing free care to the poor but have developed elaborate systems to convert needy patients into sources of revenue. In the case of Providence, thousands of poor patients were saddled with debts they didn't owe.

Providence was founded by nuns in the 1850s and has a mission to serve all. Providence is a nonprofit health system with more than 900 clinics and 51 hospitals. Last year, it had revenue of $27 billion.

Providence has invested $10 billion in top private equity firms. Its own venture capital fund is run by it.

Providence spent 1.24 percent of its expenses on charity care in the year before the Rev-Up program started. According to an analysis of hospital financial records, that was below the average of 2 percent for nonprofits nationwide.

Last year, Providence spent less on charity care than it had in the previous year.

Hospitals are required to post their financial assistance policies in hospital waiting rooms. The federal law doesn't say who is eligible for free care.

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Some states have laws that specify which patients are eligible for free or discounted care. Washington is where Providence is located. If you make less than 300 percent of the federal poverty level, hospitals in the state must give you free care. A family of four can make that threshold.

Bob Ferguson, the state's attorney general, accused Providence of violating state law by using debt collectors to pursue more than 50,000 patient accounts. The patients were wrongly claimed to owe more than 73 million dollars, according to the suit.

Debt Collectors will no longer be used by Providence to pursue money from low-income patients who should be eligible for free healthcare in Washington.

The problems are not limited to Washington, according to The Times. Patients who received free care in California and Oregon said they were charged thousands of dollars and harassed by collection agents. Credit scores were ruined for many people. Others had to cut back on groceries to make up the difference. Hospitals in both states are required to give free or discounted care to low income patients.

A sonogram technician who worked at a Providence hospital in Oregon feels betrayed. She took leave to have the cyst removed. She said the hospital billed her even though she was eligible for discounted care. They didn't give me anything after I worked for them so many times. After a lawyer contacted Providence, the hospital forgiven her debt.

The Times' findings about the hospital system's treatment of poor patients are very concerning and have our attention. Providence wanted to get things right, on behalf of our communities and on behalf of our patients, he said.

The health system stopped doing that in December, two years after an executive raised internal alarms about it. She said that Providence has instructed the debt collection firms it works with to not use aggressive tactics.

Providence is the largest provider of charity care in Washington. She said that Providence has been treating more patients on Medicaid, the federal-state insurance program for poor people.

Many of our practices exceed state requirements.

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The story of the country's nonprofit hospitals is similar to that of Providence.

Mother Joseph and four other nuns from the Sisters of Providence trekked from Montreal to Washington state to help the poor in 1856. The first hospital was a single room with four beds. Patients at the hospital were charged $1 a day.

Chickens, ducks and blankets were offered to patients in exchange for care.

Hospitals in the U.S. were set up to provide inexpensive care to the poor, like Providence did. People with a lot of money usually hire doctors to treat them.

Hospitals were not taxed on state and federal income.

The federal government created Medicare and Medicaid in the 1960's. Millions more people had health insurance.

The I.R.S. began allowing hospitals to provide more than just free healthcare in order to justify their tax exempt status. Hospitals took advantage of the new flexibility to argue that salaries of employees counted towards the I.R.S requirement.

Hospitals were abusing their status as nonprofits.

In 2005, the I.R.S. commissioner wrote to the Senate saying that some tax-exempt health care providers may not differ from for-profit providers in their operations, their attention to the benefit of the community or their levels of charity care.

Some hospital executives think of for-profit companies in a similar way. Providence's chief executive told an industry publication that "Nonprofit health care is a misconception."

He said that it is tax-exempt. It makesprofits.

The hospital's mission is supported by those profits. Every dollar we make goes back into Seattle, Portland, Los Angeles, Alaska and Montana.

Providence has become a financial powerhouse due to Dr. Hochman's leadership. It made over a billion dollars in profits last year. Providence is losing money this year.

Providence has a lot of wealth due to it's status as a nonprofit. According to the Lown Institute, Providence received over one billion dollars in tax breaks in the last year.

The more money the hospital system makes the more it can expand. The better its cash reserves, the better its credit rating. Providence was able to cheaply borrow money, which it could then use to grow.

Providence has opened or acquired 18 hospitals over the last 10 years. The doctor earned $10 million in 2020.

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According to a review of patient complaints and five current and former executives, Providence collected money from poor patients even before the Rev-Up program began.

The twins were born at a Providence hospital in Washington. State law allowed her to receive charity care.

Providence didn't tell her It billed her more than $2,500. She was put on a plan to pay $100 a month.

It was more than Ms. Haffner-Ratliffe was able to pay. She didn't have enough gas to drive her car. Her boyfriend walked into her apartment one day and found her crying. Providence sent a debt collector to chase her after she fell behind.

Debt collection companies can put people over the edge. Credit-rating firms can ruin a patient's credit scores by telling them about their debts. That makes it more difficult to buy or rent a car or home.

Her credit score was slashed by 200 points. She didn't have a credit card for a long time. Ms. Tizon said that the hospital had told Ms. Haffner-Ratliffe how to apply for financial aid but that she had not done so. Ms. Haffner-Ratliffe and her parents don't agree.

Providence was trying to find ways to save money. It had recently merged with another hospital system.

Providence turned to McKinsey. Five current and former executives said that the firm was assigned to maximize the money that Providence collected. The hospital system wanted to use the same tactics it had used with Ms. Haffner-Ratliffe.

The goal of Rev-Up was to accelerate revenue growth.

According to documents included in Washington's lawsuit and training materials obtained by The Times, administrative staff were told to tell patients that "payment is expected." According to six current and former hospital employees, they were told not to mention the financial aid that Providence was required to provide.

A training document titled "Don't accept the first No" led staff through a series of questions. The first question was, how would you pay that? Employees were told to ask for half the balance if that didn't work. Staff can offer to set up a payment plan if that's not possible. Workers should only tell patients if they are eligible for financial assistance.

If patients expressed surprise that the hospital was trying to get them to pay, the training document explained what to do. We are a non profit. We want to inform our patients of their balances as soon as possible so that the hospital can save money.

The staff members were told to ask how they could take care of this.

If it falls your lot to be a street sweeper, sweep streets like Michelangelo painted pictures, according to a famous line from the Rev. Martin Luther King Jr.

The intent of Rev-Up was not to target or pressure those in financial distress. She said it was to provide patients with more transparency.

The training materials developed by McKinsey were not in line with Providence's values.

Employees who were in charge of collecting money from patients said the aggressive tactics went beyond the script provided by McKinsey. The current and former Providence employees said that in some Providence collection departments wall-mounted charts were used to track employees progress towards their monthly collection goals.

An employee at a Providence hospital dressed up as a wrestler on Halloween. The staff was supposed to ask patients how, not whether, they would pay, and that's what the costume was about. Ms. Tizon said costumes like that were not the culture they wanted.

Some Providence employees were concerned about the Rev-Up program.

It was terrible working for the rich system and not being able to help people who were just crying in front of me.

Taylor said that Providence had struck her as predatory when she was working in the emergency department. She was told to go to the patients as soon as possible. She asked for money at their bedside. She had to document in the patients' charts how many times she had tried to get them to pay.

She said that employees were told to collect whatever they could. She accepted some patients who offered less than $2.

"Here are people coming in at the worst time of their lives, and I'm asking them to empty their wallet."

Providence paid McKinsey over forty million dollars in 2019.

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Providence sent patients three bills when they left the hospital. One last warning would be given if they didn't pay.

One letter said it was your final chance to pay. Providence would use a third-party agency that could affect your credit rating.

Providence was supposed to screen patients at the hospital to see if they qualify for free or discounted care. According to depositions included in the Washington lawsuit and internal memos that a former Providence executive shared with The Times, Providence checked patients' income only after months of badgering them had failed.

Providence used a credit reporting company to screen accounts for eligibility for free care.

An executive later explained in an email to colleagues that the amount of free care Providence was giving was "spiking." According to depositions included in Washington's lawsuit, Venkat Bhamidipati, Providence's chief financial officer at the time, made a change.

Providence used to waive any outstanding portion of their bill when they treated patients who were on Medicaid. Providence stopped doing that in the new year. Debt Collectors were sent to Medicaid patients. In Washington, Oregon and California nonprofits are required to provide free care to patients earning below certain thresholds.

The changes were harming patients.

Lesa Wood, a director of financial counseling and assistance, sent an email to her colleagues in late 2019.

The charity care spending of the Providence system was down in 2020.

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He went to the Providence hospital in Orange County, Calif., in November of 2020 with a splitting headaches, blurred vision and nausea. He said doctors gave him a shot that made him feel better.

California has its own version of Medicaid, known as Medi-Cal, and Mr. Aguirre was on it. His low income made him eligible for free care.

He said he received a bill from Providence in early 2021. He didn't have the money to pay.

Harris & Harris received Providence's account. Mr. Aguirre said that he was hesitant to go to Providence again because of the calls from Harris & Harris employees.

He said that he tried not to go to the emergency room because his daughters had gotten sick and he had Covid. I have a lot of fear in me.

According to Dean A. Zerbe, who worked for the Senate Finance Committee, Providence may be hoping for that outcome.

They want to make sure that they don't go back to that hospital and they tell their friends not to.

An ambulance took a patient to the Providence hospital in Washington. Her kidneys were failing and she was a diabetes patient. She was put on medication to treat an underlying problem. She was in the hospital for a while.

Ms. Nyfors is covered by Medicare and only has an income of about $1,700 a month. She was able to receive free care due to her low income.

After Medicare paid Providence's share, the amount was left over. The amount was not easy to calculate. Ms.Nyfors knew that her heating bill would take up a lot of her check. She was only able to choose between paying in full or setting up a payment plan.

She agreed to have a $162.50 withdrawal from her bank account every month until the bill was paid. She began buying less groceries. She didn't have heat. She made it last longer by splitting her medication.

She didn't know she qualified for free care until she read about it. Providence paid Ms.Nyfors' bill and refunds her payments after she was interviewed.

She received a letter from Providence. She was asked to give money to the hospital.

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Providence Alaska Medical Center is the state's largest hospital and was visited by a single mother who works at a Wendy's.

She was 24 weeks pregnant with a baby. She told herself that she should let this be a problem.

Ms. Weller gave birth to a baby. The boy weighed barely a pound when he was born. She decided to name him. She said that a hospital employee asked how she would pay as she lay in bed with pain all over her body. She said that she applied for Medicaid to cover the bill.

The man died after five days in the hospital.

Ms. Weller became aware of Providence's new policies.

After leaving the hospital, the phone calls started. Ms. Weller panicked when Providence employees told her she had overpaid.

She said that she had told Providence that she was too thin to be a single mother. She was asked if she could pay less. She said she was offered a payment plan.

She said it was like they were following a plan. It was like a robot.

According to emails disclosed in Washington's litigation with Providence, a Providence executive questioned why Weller had a balance. Balances after Medicaid are being excluded from presumptive charity process according to a colleague.

Ms. Weller had to change her phone number. Her credit score went from a good 650 to a bad 400. She didn't pay any of her bills.

Susan C. Beachy and Beena Raghavendran worked on the project.