Nonprofit Hospitals Get $60 Billion in Annual Tax Breaks in Order to Aid the Poor, but Often Use High-Pressure Opaque Tactics to Collect Full Payment

(p. A1) Nonprofit hospitals must have financial-assistance policies for needy patients, under federal requirements tied to an estimated $60 billion in annual tax breaks.

They often make that aid hard to get. Hospitals put up obstacles, delay checking eligibility and sometimes press for payments that aren’t refunded even if a patient eventually gets qualified for assistance.

That is according to a Wall Street Journal analysis of thousands of nonprofit hospital policies in filings to the Internal Revenue Service and posted by hospitals, as well as thousands of pages of internal documents from government hospitals obtained through public-record requests and the experiences of dozens of advocates and patients who have (p. A9) applied for aid.

. . .

An earlier Journal analysis of Medicare filings highlighted how little of nonprofit hospitals’ billions in revenue goes toward financial help for low-income patients. The new analysis uncovered the barriers many hospitals place in the way of patients who should qualify for assistance—even under the hospitals’ own criteria.

Under tax laws, nonprofit hospitals are set up to function as charities benefiting their communities. Government facilities, whose policies the Journal also looked at, are also intended to serve the public, though they aren’t subject to all the same IRS requirements as private nonprofits. The Journal found that many of these hospitals act like for-profit businesses in their efforts to get paid, even by those who can’t afford it.

. . .

Separate from the analysis of nonprofit hospitals’ IRS documents, the Journal also obtained internal documents on patient-billing procedures from large state and local government hospitals, including academic medical centers, through public-records requests. These hospitals share a similar mission with private nonprofits to serve communities.

The thousands of pages of procedures, scripts and other training material for hospital staff give an inside look at how some hospitals routinely push patients toward payment, including through installment plans that may come with interest. The guidelines often play down or don’t raise the option of financial assistance. Adding to the pressure, these tactics are often deployed before the patient gets care.

In a document titled “Collections Scripting for Non-Emergent Visits,” used by Georgia-based Augusta University Health System, staffers are supposed to start by requesting the entire amount due from the patient, saying, “How would you like to take care of that today?”

For the full story, see:

Anna Wilde Mathews, Andrea Fuller and Melanie Evans. “Some Hospitals Skimp on Aid.” The Wall Street Journal (Friday, Nov. 18, 2022): A1 & A9.

(Note: ellipses added.)

(Note: the online version of the story has the date November 17, 2022, and has the title “Hospitals Often Don’t Help Needy Patients, Even Those Who Qualify.”)

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