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News of the Day ... In Perspective

09/19/2006

Nonprofit hospitals accused of overcharging, denying care

Senate investigators, finding that nonprofit hospitals routinely overcharge or deny care to patients least able to pay, are raising questions about their federal tax exemptions, which cost the Treasury billions of dollars each year.

Nonprofits frequently charge higher prices to poorer, uninsured patients than to better-off patients with health coverage, investigators said.

Sen. Charles Grassley (R-IA) stated that inconsistent reporting requirements and lack of standards make it impossible to determine accurately whether nonprofits are meeting their charitable obligations. Some say hospitals meet the requirements simply by offering free eye or breast examinations.

Some for-profit hospitals provided as much or more charity care than nonprofits, according to Senate staffers.

The Finance Committee staff surveyed 10 hospitals and also looked at cases of alleged abuse.

One patient, who nearly lost her home because of a hospital lien, which was lifted after she applied for charity care, asked: “If I qualified for charity care, why didn’t they tell me in the first place?”

In the past 2 years, lawsuits have been filed in at least 22 states, accusing nonprofits of failing to meet their tax-exempt obligations to provide indigent care. Attorneys general in several states, including Illinois, Kansas, and Minnesota, are investigating possible abuses by nonprofit hospitals (Kathleen Day, Washington Post 9/13/06).

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