Suit accuses MultiCare of violating policy over use of medical liens

March 17--A lawyer for five people suing MultiCare Health System and one of its contractors over their use of medical liens contends the Tacoma-based health care giant sought liens against people with private insurance even as it said publicly, including in a statement to The News Tribune, that it was its policy not to do so.

Attorney Darrell Cochran said the seemingly contradictory statements show why a judge should force MultiCare to turn over records to the plaintiffs regarding contracts and agreements with private insurers and government payers regarding MultiCare's use of medical liens.

"Plaintiffs are entitled to receive this requested discovery and to determine in which instance MultiCare was actually telling the truth," Cochran wrote in pleadings filed earlier this month.

Health care providers sometimes place liens against money an accident victim might get from a lawsuit or a court settlement. They do this to recoup costs in cases where accident victims, usually those without insurance, rack up bills they cannot afford to pay.

MultiCare and its collection agency, Hunter Donaldson, last week denied Cochran's accusations.

In his accusation against the companies, Cochran was referring to statements MultiCare made to The News Tribune and KOMO-TV last year when both news outlets were reporting on the lawsuits.

In June 2013, MultiCare sent to The News Tribune an email that included the following statement: "Liens are not filed in circumstances where the patient has traditional health care coverage through a commercial carrier, such as Regence or Premera."

Cochran said in court pleadings filed this month that documents recently turned over to him by MultiCare show otherwise.

"Monthly statements show that patients with Aetna, Regence, Primera, United and other 'commercial contracted' private insurers were routinely caught in the Hunter Donaldson and MultiCare lien scheme," he said.

A MultiCare spokeswoman told The News Tribune last week it is company policy not to seek medical liens against patients with private health insurance. Marce Edwards said MultiCare was assured by Hunter Donaldson that no such liens were filed.

"We are conducting a detailed audit of the lien practices to find out if there are situations in which an improper lien was filed against patients with private insurance and where we incorrectly received payment from a patient's settlement," Edwards said in an email. "If we received payments in these cases, we will promptly correct the mistake and make a refund."

Thomas Boeder, lawyer for Hunter Donaldson, said his client's policy is to not pursue liens against patients with private insurance and that Cochran's contention is "simply wrong."

Occasionally, Hunter Donaldson files liens against patients not knowing they have insurance but will rescind the liens when notified otherwise, Boeder said. And in a few cases -- 20 out of nearly 57,000 over the last two years -- patients with insurance have asked Multicare to pursue the lien instead of billing their insurance, he said.

"On those occasions, MultiCare acceded to the patient's request, and if necessary, reassigned the account to Hunter Donaldson to continue to pursue a lien recovery," Boeder said.

MultiCare also has filed a formal objection to releasing the specific records sought by the plaintiffs, saying Cochran received most of the disputed documents in response to another lawsuit he brought over the same topic.

At dispute in both lawsuits is a section of Washington law that allows some medical providers, including doctors and hospitals, to place a lien against money an accident victim might get from successfully suing or settling with the person responsible for his or her injuries.

The plaintiffs say MultiCare and Hunter Donaldson conspired to use the law to unfairly enrich themselves. MultiCare stands to gain more money by using liens to recoup its costs from money its patients obtain through a lawsuit or settlement than it does from billing insurance companies, Cochran said.

Such practices often leave accident victims with no money once they pay their medical bills, even if they gained cash for pain and suffering and other costs, he said.

Cochran has argued in court pleadings that as many as 5,000 medical liens notarized by Hunter Donaldson employee Rebecca Rohlke are invalid because she was not authorized to work in Washington but applied for a state notary public license with an address other than her own. He has sought class-action status for the case, but a judge has not granted it.

MultiCare has admitted in court documents that Rohlke used the home address of a former MultiCare vice president on her application for a notary license. But it argues that even if the liens were improperly filed, the patients still owe money for services rendered and it has a duty to try to recover its costs.

"MultiCare's hospitals open their doors to everyone and provide medical services regardless of a person's ability to pay," the nonprofit health system said last year in a statement to The News Tribune. "When there is an ability to pay, such as a third-party settlement, we have the obligation to collect a portion of that settlement so that we may continue to sustain care services for our community."

The lawsuits have caused turmoil at the highest levels of MultiCare, according to documents recently filed by Cochran.

In a November deposition, Vincent H. Schmitz, the system's former chief financial officer, described the issue as "a mess."

Schmitz told Cochran he didn't understand why former MultiCare vice president Jason Adams allowed Rohlke to use his home address on her license application or even use her at all, given MultiCare has notary publics on staff.

"I think I asked him, 'Well, why didn't you just use someone in the office?' Because we had notaries in the office," Schmitz said. "I didn't understand it. I thought it was the silliest move I ever heard of."

Schmitz said many of the system's highest executives, including soon-to-retire president Diane Cecchettini, knew about the controversy.

"She was as confused as I was about why that would have happened," Schmitz said.

There were rumors in MultiCare that Adams might have received money from Hunter Donaldson for its securing the contract, the former CFO said.

"There were some rumors about that," he said. "I think it was speculation of why was there a relationship with Hunter Donaldson."

Adams since has left MultiCare and moved to Maine. Attempts by The News Tribune to reach him have been unsuccessful.

Schmitz said the lawsuits and the ensuing publicity made Adams decide to leave.

"Yeah, it was a bad situation with the -- there was an article in the local paper that accused MultiCare of fraud and was on the front page," he said. "Then there was a TV reporter that came into the office. Then they went to Jason's house, and his wife was very upset, being subjected to that, and so that was kind of humiliating, I think."

Adam Lynn: 253-597-8644 adam.lynn@ thenewstribune.com @TNTadam

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