Sen. Grassley: Tax-exempt hospitals shouldn't need 'herculean oversight' to meet charitable obligations

Tax-exempt hospitals across the nation are using aggressive collection practices and withholding services until patients prove their ability to pay, Sen. Chuck Grassley, R-Iowa, wrote in a recent op-ed in STAT.

Mr. Grassley cited to several examples of tax-exempt hospitals demanding payment before providing care, steering uninsured patients to local clinics instead of treating them in the emergency department and referring patient accounts to for-profit collection agencies.

"All of this is contrary to the philosophy behind tax exemption," wrote Mr. Grassley. "In exchange for the taxes they'd have to pay if they were for-profit businesses, nonprofit hospitals are supposed to provide treatment for those who can't pay or can't pay enough toward the cost of their own care."

In 2016, Mr. Grassley released the results of his inquiry into St. Joseph, Mo.-based Mosaic Life Care, which revealed the tax-exempt facility was referring patient accounts to its in-house collection agency without offering charity care. Mosaic ultimately forgave $16.9 million in patient debt.

Although Mr. Grassley was pleased with the end result in the Mosaic case, he said getting tax-exempt hospitals to meet their obligations should not require investigations into collection practices and inquiries from lawmakers.  

"It shouldn't take a herculean oversight effort for tax-exempt hospitals to follow the spirit and letter of the law on charitable obligations," he wrote. "Hospitals should do the right thing when no one's looking."

Although some tax-exempt hospitals fail to meet their obligations, Mr. Grassley said the majority of these organizations fulfill their duties. "Most of them work hard to meet their obligations and care for low-income patients to the best of their abilities," he wrote.

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