Nonprofit Hospitals Faulted For Stinginess With Charity Care : Shots - Health News Nonprofit hospitals pay no federal, state, or local taxes. In return, they are expected to offer a community benefit, including free and discounted care for low-income patients. But a study by the Congressional Budget Office found that, on average, not-for-profits are providing only slightly more uncompensated care than for-profit hospitals.
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Nonprofit Hospitals Faulted For Stinginess With Charity Care

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Nonprofit Hospitals Faulted For Stinginess With Charity Care

Nonprofit Hospitals Faulted For Stinginess With Charity Care

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Melissa Block. About three-fifths of the nation's hospitals are nonprofit. That means they don't pay federal, state or local taxes. In return, they're expected to offer a benefit to their community, including free and discounted care for the poor. But critics say many hospitals aren't doing nearly enough.

Jenny Gold, of our partner Kaiser Health News, looks at the issue in Ohio. There, one nonprofit health system has been suing low-income patients who don't pay their bills.

JENNY GOLD, BYLINE: Lori Duff and her family live paycheck to paycheck in their modest home in Columbus, Ohio. Lori works as a manager at an auto parts store. And she's the family's sole earner, pulling in about $25,000 a year. That's just below the federal poverty level for a family of five. She and her husband, a stay-at-home dad, have their hands full with a mortgage to pay and three very active little boys, ages 1, 4 and 6.


LORI DUFF: Well, here. Yours is done. You want to take it to the table?


GOLD: The family can't afford health insurance, but when Lori got pregnant with her third son, Henry, she went for prenatal care at Mount Carmel Health System, a local, nonprofit Catholic hospital. Then, last summer, she started getting letters and phone calls from a debt collector, demanding $1,800 for the visits.

DUFF: It's hard to make bills meet. And then when a doctor bill gets thrown in, you know, you try and work it in the best you can. But when people start harassing you and they call you, like, on a daily basis or every other day, demanding money you don't have - I mean, it's hard.

GOLD: Especially since Lori would likely be eligible for free care under Mount Carmel's financial assistance policy. She had even applied for, and received, charity care at another hospital nearby, with no trouble at all. But the debt collector kept calling.

DUFF: I was like, I can make a $20 payment. And the guy on the phone told me, that's not good enough; we need at least 400-and-some dollars down. And I'm like, well, I don't have that. You can have what I have in my account right now - it's $1.25.

GOLD: He said her paycheck could be garnished until she paid off the bill. And then, a few days later, he called to tell her that the hospital was suing her for the whole $1,800.

What's it like to get sued?

DUFF: Scary. There's really no other way to say it. But I've never been in this situation, and it's hard. You know, I don't know if they can take my house that we've worked for so hard, or anything.


GOLD: Ohio actually has a law that prevents foreclosures based on medical debt alone. But it is legal for hospitals to garnish patient wages, attach bank accounts, and get a lien on any future earnings, including from the sale of a house. Between 2009 and 2011, Mount Carmel sued nearly 1,600 people, almost all of them patients who didn't pay their bills - though not all would have qualified for financial assistance. That's a lot more lawsuits than the other hospitals nearby.

KATHLEEN MCGARVEY: The vast, vast majority of the medical debt cases that we get are from Mount Carmel.

GOLD: That's Kathleen McGarvey, a lawyer at Columbus Legal Aid, which is currently representing six patients being sued by Mount Carmel, including Lori Duff. McGarvey says all of them were eligible for free care. The patients now face bankruptcy, ruined credit scores, and bills that are often higher than what insurers would pay.

Karen Geisler, who runs Mount Carmel's billing division, says the hospital isn't doing anything wrong.

KAREN GEISLER: In order to provide charity - and we provide a lot of charity, and do a lot of good in the community - we have to collect payment from those who can afford to pay us. And you know, at this point, we had belief that these people could afford to pay it.

GOLD: Mount Carmel spends about 1.9 percent of its total expenses on charity care. That's close to the national average, which economists say is much less than the value of the tax breaks nonprofit hospitals receive. Mount Carmel gets about 60,000 financial-assistance applications each year. And of those that are completed, Geisler says they approve more than 90 percent for some sort of aid from the hospital or state.

GEISLER: If there are people out there who deserve financial assistance but did not receive it, they either failed to apply for it or they failed to give us the information that we needed to confirm what they wrote on their application. We're making every effort to get people qualified for financial assistance with Mount Carmel.

GOLD: Lawsuits against low-income patients like Duff have attracted the attention of lawmakers across the country, including Republican Sen. Chuck Grassley of Iowa. He says there's no point in hospitals going after patients who simply can't pay.

SEN. CHUCK GRASSLEY: 'Cause you aren't going to get it out of them anyway. If they don't have it, you know, you can't get blood out of a turnip.

GOLD: Grassley has been leading the charge for years to hold nonprofit hospitals more accountable for their tax breaks, which are worth billions of dollars and give them an edge over their for-profit competition.

GRASSLEY: And that tax exemption carries with it certain responsibilities. And one of them is to provide charitable care. I mean, that's why they're set up, right?

GOLD: Grassley helped get provisions in the 2010 federal health law that prevent nonprofit hospitals from taking extreme collections actions. The law also prohibits nonprofits from charging higher rates to uninsured patients.

Several states are taking matters into their own hands. Illinois recently revoked the tax exemptions of several nonprofit hospitals they determined didn't do enough charity care. But for Lori Duff in Ohio, who still owes $1,800, that's little comfort.

DUFF: I've never been to court for anything like this. Like, you know, it's crazy. It's a hospital bill. It's a doctor bill. Everybody needs care.

GOLD: The lawsuit against her is moving forward, and there's no guarantee this will be her last time in court. While her three sons are eligible for Medicaid, Lori and her husband make just a few hundred dollars a year too much to qualify. So for now, they're still uninsured and in need of charity care.

For NPR News, I'm Jenny Gold.

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