WASHINGTON – Sen. Chuck Grassley of Iowa is asking questions of a Missouri non-profit hospital that reportedly sues large numbers of low-income people over treatment bills instead of working with patients to offer reasonable payment plans for medical care.

“Non-profit hospitals are obligated under law to have a financial assistance policy and alert those who can’t afford care of any assistance they qualify to receive,” Grassley said.  “Occasionally, a hospital seems to go out of its way to avoid helping the poorest patients.  When these cases come up, the hospitals should explain their practices and how they comply with the spirit and the letter of the law.  It’s a matter of accountability for the tax breaks they receive.”

Grassley wrote to Mosaic Life Care of St. Joseph, Mo., after the investigative reporting outlet ProPublica and National Public Radio reported aggressive billing from the hospital of low-income patients, including thousands of lawsuits and paycheck garnishments.

Under federal law, tax-exempt hospitals are required to provide a community benefit, which includes providing charity care to serve low-income patients.  Congress tightened the law in 2010, enacting provisions Grassley co-authored that require a hospital to complete a community health needs assessment once every three years and adopt and publicize a financial assistance policy; prohibit billing those who qualify for financial assistance the top rates; and prohibit a hospital from taking extraordinary collection actions if the hospital has not made reasonable efforts to notify patients of its financial assistance policy.   

The provisions also require the IRS to review the tax-exempt status of each hospital every three years; require Treasury and the Department of Health and Human Services (HHS) to submit an annual report to Congress on the level of charity care, bad debt expenses and the unreimbursed costs of means-tested and non-means-tested government programs; and require Treasury and HHS to provide a report in five years on the trends on the items reported on an annual basis.

Grassley’s letter to Mosaic Life Care is available here. The initial ProPublica/National Public Radio report is available here.  ProPublica and National Public Radio coverage of Grassley’s effort is available here and here.