Sen. Charles Grassley is calling out nonprofit hospitals who are suing poor patients over unpaid bills and says they could be breaking the law, according to a report by ProPublica and NPR.
Grassley, R-Iowa, sent a letter, dated January 16, 2015, to Heartland Regional Medical Center, a nonprofit hospital in St. Joseph, Mo., that has garnished the wages of low-income patients who were unable to pay their medical bills.
Citing the ProPublica and NPR report, Grassley said the hospital, which recently changed its name to Mosaic Life Care, had stretched the law to the breaking point. Grassley wrote that the hospital, “may not be meeting the requirements to be a nonprofit, tax-exempt hospital."
Grassley also asked questions about the hospital’s treatment of lower-income patients, the process by which it collects debts and how it administers financial assistance.
"Reports detail a number of instances where Mosaic failed to identify patients who would qualify for financial assistance and who have since been subject to abusive billing and collection practices," Grassley wrote. "The practices appear to be extremely punitive and unfair to both low-income patients and taxpayers who subsidize charitable hospitals' tax breaks."
As ProPublica and NPR reported, the hospital has its own for-profit debt collection subsidiary, Northwest Financial Services, which files thousands of lawsuits each year.
"The practices appear to be extremely punitive and unfair to both low-income patients and taxpayers who subsidize charitable hospitals' tax breaks."
From 2009 through 2013, the company garnished the pay of about 6,000 people and seized at least $12 million.
In response to the story, the hospital announced a review of its debt collection practices. Tama Wagner, chief brand officer for Mosaic, said the hospital expected that new recommendations would be presented to the hospital's board next month. "Our goal is to do the right thing," she said.
In further citing the ProPublica and NPR report, Grassley, chair of the Senate Judiciary Committee, said he was “astounded” that hospitals were aggressively pursuing the debts of poor patients about a decade after he launched an investigation into just what nonprofit hospitals were doing to warrant their tax-exempt status. Grassley was then chair of the finance committee.
The 2010 Affordable Care Act contains a provision, co-authored by Grassley, which requires hospitals to make "reasonable efforts" to determine whether patients qualify for financial assistance before taking an aggressive step like filing a lawsuit. It didn't appear that Mosaic had made such efforts, said Grassley.
As ProPublica and NPR reported, the hospital said it had publicized its financial assistance policy in a number of ways. But Mosaic put the onus on patients to actively seek assistance and said those that didn't, and had their wages garnished as a result, were truly at fault.