Predatory Practices of Nonprofit Hospitals

ACORN International Financial Justice Health Care Labor Neighbor Local 100 United Labor Unions

            Pearl River     We keep beating this drum, over and over.  Nonprofit, tax-exempt hospitals are supposed to provide charity care to justify the fact that they do not have to pay federal taxes.  This benefit is worth billions for some hospital chains and is always a boon to any nonprofit hospital.  The Affordable Care Act in 2008 even made it clear that the IRS was supposed to police the actual administration of this care and withdraw tax exemptions when it wasn’t happening, although in their crippled situation their enforcement has been virtually nonexistent.

ACORN’s entered a partnership with Labor Neighbor Research & Training Center and Local 100 United Labor Unions to create the Hospital Accountability Project to look at nonprofit hospitals.  We’ve issued comprehensive reports based on hospital 990 tax filings with the IRS on two fronts required by law and regulations.  One involved whether hospitals in Louisiana, Texas, and Arkansas were providing adequate charity care.  The other looked at the same hospitals and whether or not they were making their pricing transparent.  The results were heartbreaking.  Big chains like the New Orleans-based Ochsner hospitals in south Louisiana and parts of Mississippi were providing significantly less than 1% of their gross revenues for charity care as one horrid example.

All of which made us ecstatic to see the New York Times finally jump on this bandwagon by going deep on a couple of mega-nonprofit hospital chains, first Providence, in the West, as well as Bon Secours in the East.

Providence created a program called Rev-Up in order to hound patients for every dollar despite the fact that they were eligible for charity care by state law in Washington, similar to ten other states, as well as their Medicaid income.  As the Times reported:

In 2018, before the Rev-Up program kicked in, Providence spent 1.24 percent of its expenses on charity care, a standard way of measuring how much free care hospitals provide. That was below the average of 2 percent for nonprofit hospitals nationwide, according to an analysis of hospital financial records by Ge Bai, a professor at the Johns Hopkins Bloomberg School of Public Health.

They turned one and all over to collection agencies to hound folks for every dollar and made their own staff into money-grubbers.  It all worked for them.  Although they avoid about $1 billion in taxes, they made out like bandits and trumpeted the fact that they were a profit-making, nonprofit.  Luckily, they have been sued by the Washington State Attorney General for flaunting the law.  They are of course vacillating and whining now to the press, but fighting the lawsuit tooth and nail.

Bon Secours chain, also founded by nuns like Providence, figured out a way to rip off federal programs for the poor in order to expand their facilities into more wealthy areas.  A special program that subsidizes the purchase of drugs for hospitals in low-income areas allowed them to decrease services in the hospital, while clearing $100 million that they could use to upgrade in rich areas.  All of which is disgustingly predatory.

I could go on and on, and I guarantee that I will as more folks sign onto our program of holding nonprofit hospitals accountable.  We estimated that another billion dollars in lifesaving charity care would be provided in just the three-state area that we researched, if all of the hospitals hit the average for charity care.  Shaming is good for all of these hospitals, but the only real solution is going to be direct action and organizing in their service areas while forcing the IRS to finally do its job and pull their tax exemptions either forever or until they do right.