Poorest Patients Sued by Some Non-Profit Hospitals

Monday, January 26, 2015
James Flynn, CEO of Heartland Regional Medical Center

Nonprofit hospitals have been suing poor patients for not paying their medical bills, provoking anger from one key Republican on Capitol Hill.


An investigation by National Public Radio and ProPublica looked at half a dozen states and found nonprofit hospitals in each one that had taken low-income patients to court over unpaid bills. One of the worst offenders was Heartland Regional Medical Center in St. Joseph, Missouri, which is changing its name to Mosaic Life Care. “Thousands of patients a year are getting their paychecks docked by the hospital and its debt collection arm,” Chris Arnold at NPR reported.


In some cases, the hospital garnished the wages of struggling workers while charging them 9% interest on their debts. One family, which had endured the wage garnishment for a decade, should have qualified for free medical care under the hospital’s charity care policy, according to Arnold.


Southeast Alabama Medical Center (SAMC) has a particularly insidious tactic: it forces incoming patients to sign a waiver allowing the hospital to garnish their wages to settle hospital charges and legal fees. Normally, those making less than $30,000 a year are exempt from garnishments, but SAMC and other hospitals skirt this consumer protection with the waiver. This policy exists despite SAMC chief executive Ronald Owen assuring ProPublica “we’re going to be as compassionate as we can.”


The stories caught the attention of Senator Chuck Grassley (R-Iowa), chairman of the Senate Judiciary Committee, who said the hospitals might be violating the law through suing patients and seizing portions of their paychecks.


Grassley told NPR/ProPublica that he was “astounded” by the legal tactics of hospitals that, because of their nonprofit status, don’t have to pay federal income tax or local property tax.

The GOP senator said these hospitals should have to “earn” their tax-exempt status by “taking care of people who couldn’t provide for their own health care.”

-Noel Brinkerhoff


To Learn More:

Senator ‘Astounded’ That Nonprofit Hospitals Sue Poorest Patients (by Chris Arnold, NPR)

Reporter Finds Nonprofit Hospital’s Suit against Uninsured Patient was Just One of Many (by Joseph Burns, Covering Health)

In Alabama, a Public Hospital Serves the Poor — with Lawsuits (by Paul Kiel, ProPublica)

Getting Stuck: Uninsured Patients Slammed with Lawsuits by Not-for-Profit Hospital (by Dianna Wray, Houston Press)

Hospitals Reaping Nonprofit Tax Breaks Come Up Short in Charitable Work (by Noel Brinkerhoff, AllGov)


DDearborn 1 year ago
Hmmm Come on people this is all such a con. All the government has to do is revoke the hospitals non profit status and tax the hell out of them. In no time flat the hospital will stop terrorizing the poor.
hp 1 year ago
Here we go! Yee-Haw!! First the government (by law) herds all the poor people into the big Medicaid Corral. Then, when the inevitable major medical procedure arrives due to old age, crappy American diet or whatever, then comes the invite to the Asset Forfeiture Square Dance! Contrary to popular assumptions, lots and lots of poor people young and old have assets. Believe it or not! Through inheritance or from when they weren't poor and actually had a decent job these now poor neo-Medicaid people accrued homes, properties, vehicles, etc. OK. Now that they've received a major operation or another costly (is there any other kind?) medical "service" they OWE, Medicaid or no Medicaid.. So to all you OBarnum neo-Medicaiders, the government says GIVE IT UP! Give up those houses, that land, those vehicles, those stocks. You owe and YOU WILL PAY. One way or another. Capiche? Hey, what do you think this is? France?

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