Senator Launches Investigation Into Non-Profit Hospital’s Collection Practices

Sen. Chuck Grassley [R-Iowa] is calling out some non-profit hospitals for their “relentless” debt collection efforts and is investigating one such facility for how it handles debt collection, charity care, and financial assistance programs.

Sen. Grassley yesterday sent a letter to Methodist Le Bonheur Hospital in Memphis, Tenn., seeking to ensure it is living “up to its legal obligations as a tax-exempt organization.”

Published reports have spotlighted the collection practices at a host of other healthcare networks. Hospitals in VirginiaOklahomaNew YorkTennessee, and Maryland have all been accused of being too aggressive with their collection efforts. Many of those facilities are non-profit hospitals and are required to offer charity and uncompensated care to individuals with little or no health insurance in exchange for their non-profit status.

Among the questions that Sen. Grassley is looking for answers for are:

  • How much money has the hospital collected from patients whose bills were at least 30 days past due? How many of those people were eligible for financial assistance?
  • How much charity care has the hospital provided in the past five years?
  • What was the hospital’s policy for notifying patients who had outstanding debts before the accounts were transferred for further collection efforts?
  • What is the hospital’s policy for transferring accounts to third-party agencies?
  • What steps does the hospital take to ensure debts are accurate before attempting to collect on them?
  • What was the hospital’s policy for determining whether to sue an individual for an unpaid debt?
  • Did the hospital own a licensed third-party collection agency? If so, how much has it collected in the past five years and what techniques did it use to collect?

“Unfortunately, I have seen a variety of news reports lately discussing what appear to be relentless debt-collection efforts by various tax-exempt hospitals, including Methodist Le Bonheur Healthcare. These efforts raise questions about how Methodist Le Bonheur Healthcare, and other tax-exempt hospitals, are complying with these requirements,” Sen. Grassley wrote in the letter.

It is likely that other lawmakers and regulators will intensify their focus into how hospitals, especially non-profit facilities, conduct their debt collection efforts.

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One comment

  1. The interesting piece here is the quote by Sen. Grassley – “Unfortunately, I have seen a variety of news reports lately discussing what appear to be relentless debt-collection efforts by various tax-exempt hospitals,….” I agree with not “relentlessly” pursuing patients that do not have the means to pay; however, what about the patient(s) who clearly DO have the means to pay? Another example of the media painting a tainted picture and an example of a politician/regulator/lawmaker not being fully educated on how the industry truly works from a collection agency standpoint. I am confident that most respectable agencies vet out and qualify the ones who do have the means to pay and focus more on that demographic. …. And we wonder what’s wrong with the healthcare system….?

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