Key Senator Raises Questions About Two Hospitals

Sen. Charles E. Grassley, Republican of Iowa, is turning up the heat on two tax-exempt hospitals, demanding information about their nonprofit status, billing practices, and the kinds of patients they serve.

The Iowa lawmaker announced yesterday that he has sent 11-page letters in recent weeks to the M.D. Anderson Cancer Center in Houston, Texas and the University of Chicago Medical Center, with each letter containing more than 40 detailed questions about the operations of the institutions. The Chicago hospital was Michelle Obama’s employer before she took a leave to work on the presidential bid of her husband, Barack.

Both medical centers have been in Mr. Grassley’s sights following press accounts about how they do business. An April article in The Wall Street Journal detailed the difficulties of a leukemia patient who had problems receiving treatment at M.D. Anderson because it required payment in advance for its services.

In August, The Washington Post wrote about the University of Chicago Medical center steering uninsured and under-insured patients to clinics as well as its ties to Mrs. Obama, who is on leave from her job as the center’s vice president of community and external relations.

The inquiries are the latest move by Mr. Grassley to investigate the role and responsibilities of nonprofit groups, including the nation’s charitable hospitals, which he says receive as much as $40-billion in benefits through their exemptions from income, sales, and property taxes; tax-deductible contributions; and tax-exempt bonds. (For more about questions lawmakers are posing, see this cover article from the latest issue of The Chronicle of Philanthropy.)

Mr. Grassley said in a written statement that he was troubled “to hear about two world-renowned hospitals engaging in questionable practices. One made it into the limelight for reportedly requiring a critically ill patient to come up with exorbitant amounts of cash upfront and badgering her for cash during medical treatment. Another appears to be culling the least profitable patients from its emergency room.”

“The answers to the questions I’m asking are critical to understanding whether these hospitals are setting standards for their peers. Those standards might include losing sight of the public service that comes with tax-exempt status.”

The University of Chicago provided a brief written statement responding to Senator Grassley’s letter.

“We have received Senator Grassley’s August 29 letter and we are beginning the process of providing thoughtful and thorough answers to his questions. Much of the information he has requested is already a matter of public record and offers evidence of our vigorous pursuit and commitment to our patient care, education, research, and community missions.”

Officials at M.D. Anderson said they would respond fully to Mr. Grassley. They said they agree that the problem of the uninsured and under-insured is a major concern, especially “because cancer is a catastrophic illness, is very expensive to treat, and is rising in incidence as our population ages and grows.”