Prompted by an investigation by ProPublica and NPR, Sen. Charles Grassley asks a Missouri nonprofit hospital to explain why it seizes the wages of thousands of its patients.
By Paul Kiel, ProPublica, and Chris Arnold
This story was co-published with NPR.
Sen. Charles Grassley said nonprofit hospitals could be breaking the law when they sue poor patients over unpaid bills and issued a stern warning to one Missouri hospital that he hopes reverberates nationwide.
Citing a ProPublica and NPR report, Grassley, R-Iowa, sent a letter Friday to Heartland Regional Medical Center, a nonprofit hospital in St. Joseph, Missouri, that has seized the wages of thousands of lower income workers who were unable to pay their medical bills.
Under federal law, tax-exempt hospitals are supposed to provide care to those who can’t afford it, but the requirements are fairly vague. Even so, Grassley said the hospital, which recently rebranded as Mosaic Life Care, had, at a minimum, stretched the law to the breaking point.
In his letter to Mosaic’s CEO, Grassley wrote that the hospital “may not be meeting the requirements to be a nonprofit, tax exempt hospital.” He also asked a battery of questions about the hospital’s treatment of lower-income patients, its debt collection practices, and how it administers financial assistance.
“The practices appear to be extremely punitive and unfair to both low income patients and taxpayers who subsidize charitable hospitals’ tax breaks.”
“Reports detail a number of instances where Mosaic failed to identify patients who would qualify for financial assistance and who have since been subject to abusive billing and collection practices,” Grassley wrote. “The practices appear to be extremely punitive and unfair to both low income patients and taxpayers who subsidize charitable hospitals’ tax breaks.”
As ProPublica and NPR reported, the hospital has its own for-profit debt collection subsidiary, Northwest Financial Services, which files thousands of lawsuits each year. From 2009 through 2013, the company garnished the pay of about 6,000 people and seized at least $12 million.
In response to the story, the hospital announced a review of its debt collection practices. Tama Wagner, chief brand officer for Mosaic, said the hospital expected that new recommendations would be presented to the hospital’s board next month. “Our goal is to do the right thing,” she said. Continue reading