Jun 28, 2019

Nonprofit hospitals act as medical debt litigators

Illustration: Aïda Amer/Axios

Tax-exempt hospitals are again raising eyebrows over how they harass patients, often the poorest, in court by trying to recoup medical debts.

Driving the news: ProPublica and MLK50 published a deep dive yesterday on Methodist Le Bonheur Healthcare, a $2 billion not-for-profit and faith-based hospital system in Tennessee that has filed more than 8,300 lawsuits against patients over the past 5 years.

  • One of the patients featured in the story made less than $14,000 last year, and Methodist is suing her for more than $33,000. The hospital operates in the second-poorest large metropolitan area in the nation.
  • Methodist obtained wage garnishment orders in almost half of the cases it filed between 2014 and 2018, meaning that the debtor's employer was required to send the court a portion of the worker's after-tax income.

Between the lines: As we wrote this week, hospitals taking patients to court is both common and longstanding.

The bottom line: Not-for-profit hospitals market themselves as charities, but they act more like for-profit peers — renewing questions of whether those organizations’ tax exemptions are justified.

  • Coincidentally, the American Hospital Association released a paper Thursday touting hospitals' community benefits, but the paper has some of the same flaws as prior analyses.

What we're watching: These practices have drawn the ire of Sen. Chuck Grassley, who is now chairman of the powerful Finance Committee.

  • "Such hospitals seem to forget that tax exemption is a privilege, not a right. In addition to withholding financial assistance to low-income patients, they give top executives salaries on par with their for-profit counterparts," Grassley wrote in a 2017 op-ed.

Go deeper: Hospitals are swimming in cash

Go deeper

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Updated 1 min ago - Politics & Policy

Trump administration to eliminate nuclear waivers tied to Iran deal

Pompeo testifies on Iran in February. Photo: Mark Wilson/Getty Images

The U.S. is ending waivers that had allowed foreign companies to work at Iran's civilian nuclear facilities, Secretary of State Mike Pompeo announced on Wednesday.

Why it matters: This will eliminate most elements of U.S. sanctions relief still in place two years after President Trump withdrew from the 2015 Iran nuclear deal. Pompeo said "continued nuclear escalation" made the move necessary, but critics warn it will encourage further Iranian enrichment.

Top Senate Democrat says State Dept. is working on new Saudi arms deal

Secretary of State Mike Pompeo briefs reporters on May 20. Photo: Nicholas Kamm/pool/AFP via Getty Images

Senate Foreign Relations ranking member Bob Menendez (D-N.J.) wrote in a CNN op-ed on Wednesday that he learned that the State Department is currently working to sell thousands of additional precision-guided bombs to Saudi Arabia.

Why it matters: Democrats say that Steve Linick, the State Department inspector general who was ousted on Secretary of State Mike Pompeo's recommendation, was investigating the administration's previous effort to sell weapons to Saudi Arabia without congressional approval.