On Monday, Santa Clara Valley Healthcare in California began notifying 43,000 patients about their eligibility for billing corrections and refunds.

The health system includes a network of primary and specialty clinics as well as three acute care hospitals — one of which, Santa Clara Valley Medical Center, is the largest public hospital in California. The system’s new patient outreach effort is a result of a lawsuit filed against Santa Clara County in 2019 and settled in June.

The suit had to with Santa Clara Valley Medical Center’s alleged failure to inform patients about its programs for charity care — which refers to free or discounted care provided to low-income patients who do not qualify for third party payer programs like Medicaid or Medicare. Three former patients of the hospital filed the complaint, charging that the county did not tell them about the hospital’s charity care policies during their hospitalization or after their discharge. This led them to be sent to collections between 2013 and 2017 for bills ranging from $8,000 to $35,000, the lawsuit said.

At the time of her hospitalization, one of the plaintiffs was an uninsured single mother of two. Another was uninsured and primarily Spanish-speaking, and the third patient was homeless.

As part of its settlement for the lawsuit, Santa Clara County will send notices to patients whose bills were sent to collections between October 28, 2018, and December 31, 2021 informing them that their bills can be re-reviewed for full discounts, partial discounts or refund eligibility.

Patients who receive this letter will have 65 days to return a form confirming their interest in applying for a bill correction. After that, they will have an additional 150 days to complete their application, which involves submitting documents and verifying personal information. 

By settling the lawsuit, Santa Clara County also vowed to establish better policies at its hospitals to ensure patients are aware of its charity care programs and how to apply for discounted care, the county said in a statement. To begin enacting this change, the county will start sending out informational notices to all its patients who may be eligible for charity care.

Going forward, the notices will be given to patients during their hospitalization or mailed within a few days of their discharge. The informational sheets, which will be available in eight languages, will educate patients about how they can qualify for free or discounted care.

Additionally, the notices will inform patients that the county can help them with payment assistance forms and applications for state-sponsored health insurance, such as Medi-Cal. The notices will also tell patients that they can apply for financial assistance at any time in the collections process.

“These 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.

California requires all of its acute care hospitals to provide charity care. In 2020, Santa Clara County’s board approved a program that provides free care to hospital patients whose annual household income is at or below 400% of the federal poverty line, as well as significantly discounted payments for those whose income is between 401% and 650% of the poverty line.

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