US senator calls on IRS to give updates on nonprofit hospital reforms

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Sen. Chuck Grassley (R-Iowa) is seeking updates from the IRS on implementing tax-exempt hospital accountability measures in light of two instances of nonprofit hospitals aggressively suing patients.

In the letter, sent to IRS Commissioner John Koskinen, Sen. Grassley named St. Joseph, Mo.-based Mosaic Life Care, which ultimately forgave $16.9 million in debt for patients after the senator was critical of Mosaic's billing tactics last year, and after news coverage of its aggressive collection practices. He also named Deaconess Hospital in Evansville, Ind., which agreed to change its financial assistance policy after being in the news for patient collection lawsuits.

"These are welcome improvements to the charitable hospital community and others should follow the examples set by Mosaic and Deaconess to better fulfill their charitable mission," Sen. Grassley wrote in his letter.

Sen. Grassley asked for updates on the IRS' implementation of nonprofit hospital reforms that he authored and that were put in place in 2009. These include the public provision of a financial assistance policy and imposing restrictions on certain billing and collection procedures. "Given the abuses observed in my investigation of Mosaic, I am interested in learning more about the IRS' implementation and enforcement of these provisions," Sen. Grassley wrote. "The information provided with respect to Mosaic illustrates the value of congressional oversight and sheds light on some of the steps that other charitable hospitals can take to ensure that low-income patients are treated fairly."

Sen. Grassley also asked about the status of the requirement, which he also authored, that the IRS and HHS collect information on nonprofit hospitals and provide an annual report to federal lawmakers. The first report was issued in January 2015 covering 2011. The IRS has not yet issued a 2016 report covering 2012, according to a news release.

"As commissioner of the Internal Revenue Service, you should be made aware of problematic activity within the charitable hospital community," Sen. Grassley wrote. "Granted, we can both agree that many charitable hospitals perform good work on behalf of the communities that they service. However, some charitable hospitals get as close to the line as possible, while others callously breach it. It is important that Congress, via its oversight role, and the IRS ensure that charitable hospitals are functioning as intended."

Sen. Grassley's full letter is available here. More information on his Mosaic inquiry is available here.   


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