After a case settlement on one of the debt collection suits brought against Yale-New Haven Hospital, some individuals who owe the hospital money for their hospitalization time may find their debts reduced or completely cleared.

The settlement requires Yale-New Haven to comply with a law that went into effect two years ago and to send a letter to delinquent patients with a one-page application to apply for free health care funds that will be credited to their debts, said Daniel Livingston, a lawyer for the Service Employees International Union, which funded the lawsuit.

To date, almost 15,000 patients have received letters inviting them to apply for free funds, Previously, patients had to obtain a Medicaid waiver before becoming eligible for free care funds.

Under the settlement, patients with an income below the federal poverty line will have their hospital fees fully waived, and other indigent patients will have their costs partially defrayed, Yale-New Haven spokesman Vincent Petrini said.

The hospital decided to settle with SEIU outside of court when it became clear that it would benefit the patients involved and was not politically motivated by SEIU, which has been fighting to extend unionization rights to some hospital workers for two years, Petrini said.

“We are very supportive of the settlement,” Petrini said. “We think it’s a move that demonstrates a lot of progress.”

By the time lawyers for both parties finalized the settlement on Oct. 7, the hospital had already sent out most of the applications to the 18,000 patients affected by the lawsuit, all of whom received treatment at Yale-New Haven between 1999 and 2003. Since last week, about 200 of the applications have since been returned to patients, all of whom have received funding to defray their hospitalization costs.

But SEIU spokesman William Meyerson said the application process remains difficult and cumbersome for former patients, in part because it requires them to collect signatures from other individuals. Even after the application is filed, the hospital must still decide whether to award free bed funds to patients.

“It’s draconian,” Meyerson said. “One of the things they require on the application is that if you live with other people, the people you live with have to sign a waiver saying they are not contributing to your care.”

Livingston credited community action as the impetus for settling the suit. Without community involvement, the case would likely still be tied up in the courts, he said. SEIU is pursuing funding another suit addressing some more of Yale-New Haven’s debt collection policies, Livingston said.

“We expect that it’s going to continue to be a struggle,” he said. “The hospital is not used to having its policies challenged. This settlement does not mean that they are going to start doing the right thing.”

Connecticut Attorney General Robert Blumenthal LAW ’73, who backed the suit against Yale-New Haven, said he is encouraged by this month’s settlement, but thinks more work needs to be done to increase the availability of funds to eligible patients.

One of the side effects of the lawsuits has been a recent change in some of Yale New Haven’s other billing policies. The hospital recently reduced interest rates for patients from 10 percent to 5 percent, said Yale Law School Professor Robert Solomon, who runs a group that provides legal services to community groups.

Yale Law School Professor Robert Solomon, who heads of a group that represents community organizations, said the hospital has reduced interest rates from 10 percent to five percent. Solomon is also representing patients in a pending suit before Yale-New Haven, which aims to provide patients with additional debt relief.

“Our suit also acts for class relief,” he said. “The extent that relief has already been offered to members of the class is a very positive thing.”