Nonprofit Hospital Forgives Debts And Stops Suing So Many Poor Patients

National Public Radio
Chris Arnold and Paul Kiel
June 2, 2016

For years, Heartland Regional Medical Center, a nonprofit hospital in the small city of St. Joseph, Mo., had quietly sued thousands of its low-income patients over their unpaid bills.

But after an investigation by NPR and ProPublica prompted further scrutiny by Sen. Charles Grassley, the hospital overhauled its financial assistance policy late last year and forgave the debts of thousands of former patients.

The hospital “deserves credit for doing the right thing after its practices were scrutinized,” Grassley, R-Iowa, wrote last week in a letter to his Senate colleagues, “but it should not take congressional and press attention to ensure that tax-exempt, charitable organizations are focused on their mission of helping those in need.”

The changes at Heartland, which now goes by Mosaic Life Care, are a boon to its poorest patients. But after NPR and ProPublica’s investigation into Mosaic, ProPublica has since found numerous cases across the country of nonprofit hospitals, which pay no income tax, filing suits by the thousands.

Some have filed more suits than Mosaic ever did. In Evansville, Ind., for example, Deaconess Hospital filed more than 20,000 lawsuits from 2010 through 2015, according to ProPublica’s analysis of state court data. Deaconess reconsidered its financial assistance policies after questions from ProPublica last week and said it would be making changes.

Grassley, in a floor speech announcing the results of his investigation, said, “Let me be clear: Nonprofit hospitals should not be in the business of aggressively suing their patients,” he said. “In essence, because of the favorable tax treatment these hospitals receive, they have a duty to help our nation’s most vulnerable.”

As part of Mosaic’s revamped policies, it instituted a “medical debt grace period” late last year. Typically patients who have been sued by the hospital are no longer eligible for financial assistance. But during the grace period, former patients with outstanding debts were allowed to be evaluated for assistance.

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