Senator Blasts Payment Policies at Nonprofit Hospitals

Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee, once again blasted nonprofit hospitals during a Senate hearing today about ways to fix the country’s health-care system.

The Iowa senator, who frequently questions whether nonprofit hospitals are earning their tax breaks, specifically criticized institutions that have an “upfront collection policy,” or demand cash payments from people with inadequate or no insurance before treating them.

He cited an article in The Wall Street Journal about a leukemia patient who had trouble getting care at the M.D. Anderson Cancer Center, in Houston, because her insurance did not cover all of her treatment.

That patient, Lisa Kelly, was scheduled to testify at the Finance Committee’s hearing, “47 Million and Counting: Why the Health Care Marketplace Is Broken.” “The troubling thing about her story is that these were actions taken by a hospital that is funded through taxpayer dollars and charitable gifts,” Mr. Grassley said.

He said nonprofit hospitals receive $40-billion in benefits through their exemptions from income, sales, and property taxes; tax-deductible contributions; and tax-exempt bonds.

“The current environment is no different than where we were over a hundred years ago,” he added. “Back then, people with money had private physicians who made home visits. The poor received treatment at alms houses supported by philanthropy. The only difference now is that many of those former ‘alms houses’ have become rich institutions that believe they no longer need to serve the poor to reap all the beneits of their tax-exempt status.”

M.D. Anderson told the Journal that it started the upfront-collection system in 2005 after its unpaid patient bills jumped by $18-million, to $52-million, threatening its mission to cure cancer.

Suzanne Perry