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Sen. Chuck Grassley to Hospitals: Quit Suing Poor Patients or Start Paying Your Taxes

As a result of a report from ProPublica and NPR which revealed that nonprofit hospitals have been the seizing wages of and suing low-income and working-class patients who can’t pay their bills, Sen. Chuck Grassley (R-IA) sent a letter to a Missouri hospital telling them to stop.

In the letter to Mosaic Life Care, a St. Joseph, Missouri non-profit hospital, Sen. Grassley pointed out that the hospital “is required to offer community benefit in exchange for its tax exempt status.”

“However,” continued the senator, “a recent news article has given me cause to believe that Mosaic’s financial assistance, billing, and collection practices may fail to live up to the community benefits standards and/or fail to adhere to the additional requirements for charitable hospitals.”

The report from ProPublica and NPR featured a family who has been having its wages seized by Mosaic for almost 10 years, but still owes $25,000 “and feels trapped — in part because [Mosaic] is charging 9 percent interest on that debt.”

Mosaic uses Northwest Financial Services, a for-profit debt collection agency, when patients are unable to pay their bills and sues them because of that failure to pay in full.

“Between 2009 and 2013, Northwest filed over 11,000 lawsuits against [Mosaic] patients,” wrote Grassley. “During that time, Northwest garnished the pay of approximately 6000 patients and collected at least $12 million from them.”

Mosaic “has sued more of its patients than any other hospital in Missouri.”

Because Mosaic charged patients who were eligible for financial assistance full price for their medical care, in addition to the fines and late fees for being unable to pay, Grassley said it appears “Mosaic may not be meeting the requirements to be a nonprofit, tax exempt hospital. In fact, Mosaic made a $45 million profit last year.”

Mosaic, and probably countless other hospitals, have been taking advantage of not only their patients, but the tax system as well. Hospitals like this are given nonprofit, tax exempt status so that they can offer care to the most disadvantaged patients. By charging full price and not paying their own taxes, Mosaic has been trying to have its cake and eat it too.

Americans should not have to choose between paying medical bills and feeding their families, something that these corrupt hospitals have been forcing them to do. Hopefully the attention brought by the ProPublica/NPR report, combined with the efforts from Sen. Grassley will change this broken system.

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