Senator urges hospitals nationwide to stop suing poor patients

U.S. Sen. Charles Grassley (R-Iowa) is urging U.S. nonprofit hospitals to stop using the legal system to go after poor patients over unpaid bills, according to a ProPublica and National Public Radio report.

He specifically calls out St. Joseph, Mo.-based Mosaic Life Care, formerly Heartland Regional Medical Center. In a letter, Sen. Grassley claims that the hospital "is suing low income patients to force them to pay their hospital bills, even when those patients were eligible for financial assistance and discounted treatment."

From 2009 through 2013, Mosaic's for-profit debt collection subsidiary, Northwest Financial Services, "garnished the pay of about 6,000 people and seized at least $12 million," according to the report.

"As a nonprofit hospital, Mosaic is required to offer community benefit in exchange for its tax-exempt status," Sen. Grassley wrote. "Additional requirements for nonprofit hospitals that I authored were enacted into law in 2010. Among other things, these reforms include specific financial assistance policy requirements and restrictions on the use of certain billing and collection practices. However, a recent news article has given me cause to believe that Mosaic's financial assistance, billing, and collection practices may fail to live up to the community benefits standard and/or fail to adhere to the additional requirements for charitable hospitals."

Tama Wagner, the hospital's chief brand officer, told ProPublica in a previous report that patients are given multiple opportunities to qualify for financial assistance. However, if those resources aren't utilized, action is taken to get payment for medical bills.

The hospital has announced that it will look into its debt collection practices, according to the ProPublica and National Public Radio report.

Mosaic is not alone, as nonprofit hospitals across the country are garnishing uninsured and low-income patients' wages for unpaid medical bills.

But new Internal Revenue Service rules for tax-exempt hospitals' collection practices may lower the occurrences of this practice.

On Dec. 30, due to reports of widespread use of aggressive collection tactics, the IRS published new rules that address collections practices used by tax-exempt hospitals, including garnishing patient wages.

Still, Sen. Grassley said in the ProPublica and National Public Radio report that his zoning in on Mosaic will remind other hospitals of "their humanitarian responsibilities" and "the responsibilities they have as a nonprofit."


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