Attorney General Ferguson settles lawsuit with Swedish, Providence


Attorney General Bob Ferguson is taking action against two local hospital systems after he says they didn’t inform patients when a lab provider went out of network, leaving patients to pay unexpected bills.  Now, you may be entitled to a refund.

A settlement in the case against Swedish and Providence Hospital systems has been reached.

Patients who had Premera as their insurer from 2015 to 2016 and had lab work done at Swedish or Providence Health systems may be getting a check in the next 90 days.  Attorney General Bob Ferguson claims Swedish and Providence Health failed to tell patients covered by Premera that their lab work was being done by a company that was out-of-network.

“In other words, patients would have to pay for the cost of the testing which normally they would not have to pay,” Ferguson said.

According to the lawsuit, more than 6,400 patients were impacted from January 2015 to February 2016 while CellNetix, the lab, and Premera’s contract was terminated.  Ferguson claims Swedish and Providence knew that information and did not tell its patients.  The complaint also reveals an alleged 2015 email from a Swedish executive warning, “patients don’t really have a choice using CellNetix or not when they come to Swedish so they will not be happy if they get a bill for the out-of-network difference.”

“It’s our view that it’s an unfair practice not to disclose to those patients that they now will incur those costs that they otherwise would not have,” Ferguson explained.

For its part, Swedish says CellNetix made a commitment to both hospital systems that patients would not get unexpected bills during the contract dispute with Premera.

As a result, a consent decree was filed in King County Court, where Providence and Swedish agreed to pay $1.4 million dollars to the state serving as a settlement of the case.

“Consumers will not have to do anything to get their money back,“ Ferguson said.  “The plaintiff’s will send a check to consumers.  That will come in the next 60 to 90 days, but they should see that check in the mail.”

Swedish said CellNetix, who is not a party in the case, will make a substantial financial contribution to the settlement.  Swedish sent us the following statement:

“Swedish Health Services and Providence Health & Services have a fundamental commitment to the well-being of our patients. The action by the attorney general’s office arose out of a contract dispute beginning in 2015 between Premera Blue Cross (which insures many Swedish and Providence patients) and CellNetix (a vendor that supplies pathology laboratory services to us). As a result of this contract dispute, CellNetix fell out of network with Premera in 2015 and early 2016, and some Premera-insured patients who received care at Swedish and Providence hospitals in Western Washington received unexpected bills from CellNetix during this time. We know that this experience frustrated our patients who received these unexpected bills, and we have taken steps to prevent this issue from arising again.

Swedish and Providence fully cooperated with the attorney general’s investigation, and are pleased that we were able to work with the attorney general to achieve a settlement. The settlement allows our hospitals to put this matter behind us so that we can focus on caring for our patients.

CellNetix is not a Defendant or a party to the State’s action against Swedish and Providence. In a separate business arrangement between Providence, Swedish, and CellNetix, CellNetix agreed to contribute funds towards Swedish’s and Providence’s financial obligations under their settlement with the State.

CellNetix made a commitment to Swedish and Providence that these patients would not receive unexpected bills because of its contract dispute with Premera. CellNetix will make a substantial financial contribution to the settlement because it had made assurances that its contract dispute with Premera would not affect our patients. Under the settlement with the attorney general, we have put procedures in place to ensure that when a vendor like CellNetix falls out of network with a health insurance plan, the vendor cannot send bills for unexpected amounts to patients.”

Cellnetix did not return our calls, but a spokesperson from Premera told us the lab in went back in network in early 2016.

Providence did not provide a statement.

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