Senator Chuck Grassley of Iowa, as of this month the Chair of the Senate Judiciary Committee, has led a decade-long crusade to make our nation’s non-profit hospitals more accountable to the public.
After all, the reasoning goes, non-profit hospitals are tax exempt because they provide community benefit. How this standard is defined has been the crux of the issue.
Hospitals always face a share of patients that are uninsured, who are therefore unable to meet the high costs of hospitalization. Depending on their location, some non-profits care for more non-insured patients than others. Of course, the Affordable Care Act (Obamacare) was designed in part to greatly lessen the number of uninsured among us — a win for those patients, and for the hospitals that struggle financially because of non-collected fees. The American Hospital Association (AHA) supported the passage of the Affordable Care Act under the premise that nearly all patients would become paying customers.
Since not all states (>20) have agreed to expand their Medicaid pools in spite of generous new federal funding, there are still millions of uninsured patients straining the finances of hospitals. Businesses (non-profit hospitals included) have a right to collect payment for services rendered. But how aggressive should non-profit hospitals be in pursuit of unpaid fees?
Propublica, a non-profit investigative journalism enterprise, has researched the billing practices of non-profit hospitals in six states. What they found ‘astounded‘ Senator Grassley: aggressive collection practices including lawsuits, wage garnishing, and the placement of liens on personal property. These practices are legal, but skirt the ethical notion of helping our fellow humans. If sick people are rendered health care services but then put into collections, the results can be emotionally, financially, and even physically catastrophic. To me it certainly seems counterproductive to bully members of your community, who more than likely will continue to be customers.
Stay tuned to find out if Sen. Grassley and his committee do anything to rein in these practices. My guess is we’ll see an attempt made to more clearly define the community benefit standard and put limits on what extent hospitals can go to for collecting unpaid bills. One option: taking away a hospital’s non-profit status if it continues engaging in such aggressive collection practices.