Holding Nonprofit Hospitals Accountable to New Billing Rules

Citizen Wealth Financial Justice Health Care
example of huge hospital bill

 New Orleans       Recently, I opened a bill from the city’s EMS unit, another from a hospital in the city that is somehow for profit now but was formerly nonprofit and continues to retain a 17% stake from Tulane University, which is obviously nonprofit, and a third from some unidentified group of doctors.  Interestingly, all of the bills were for about the same amounts, $3000 a pop, and all were for an individual without health insurance or income and, sadly, who could not be revived despite these $10,000 in bills received before the burial.

Talking recently on KABF’s Wade’s World to Chris Hariston, a Local 100 United Labor Unions organizer based in Little Rock, but also spearheading the effort to establish Citizen Wealth Centers in conjunction with the union there and in Dallas, Houston, New Orleans, and Baton Rouge, he indicated that they are finding that these kinds of cases are routine.  He told me he had recently worked with one woman who fortunately was on Medicare but was overbilled an uncovered $10,000 for a short hospital stay.  Going through the bill and challenging the overcharges through the Citizen Wealth Center, he was able to knock the bill down to $1300, which is still a lot, but at least is nowhere near 10 grand!

Now it looks like we have some new weapons in this fight in dealing with nonprofit hospitals right now and maybe with for profits and hybrids like Tulane in the near future.  New regulations from the Treasury Department and the IRS taking effect immediately in 2015 require nonprofit hospitals to back off of some of their gangster tactics and deal with the real situations and incomes of low and moderate income families, particularly those without any insurance.   According to the New York Times:


Under the rules, nonprofit hospitals must now offer discounts, free care or other financial assistance to certain needy patients. Additionally, hospitals must try to determine whether a patient is eligible for assistance before they refer a case to a debt collector, send negative information to a credit agency, place a lien on a patient’s home, file a lawsuit or seek a court order to seize a patient’s earnings.


This could be the kind of rule that is honored in the breach, but it also could be an opportunity.

On our part we’re having a meeting in two weeks and one proposal on the agenda will be to reach out from our Citizen Wealth Centers to all the nonprofit hospitals in our membership areas and ask for a meeting to discuss how they are implementing the new rules.  There are teeth in this program, so they ought to know that we intend to be the dentists doing the root canals.  60% of the hospitals in the US are still nonprofits and the IRS is going to review their tax exempt status every three years to see how they are doing on this.  There’s even support from the Republican side where Senator Charles Grassley has been beating the drum on whether nonprofit hospitals are earning their tax exemptions.   Furthermore industry experts and publications are already speculating that this new rule could become the industry standard, particularly in light of the fact that the Consumer Financial Protection Bureau has endorsed the new rules and advocated for wider application.  Hey, more pressure on all the hospitals could also put more push behind expansion of Medicaid programs for lower income families in the states still dragging their feet once all the hospitals start finding that it’s harder to shakedown people when they are most desperate and ill or dying.

This will be a fight worth having, but the time to draw the battle lines is now, not after too many of these institutions start trying to pretend they are complying and hoping they can get away with the same ol,’ same ol.’