NCPA - National Center for Policy Analysis


September 14, 2006

Some not-for-profit hospitals routinely overcharge or deny care to low-income uninsured patients, according to a Senate Finance Committee investigation commissioned by committee Chair Chuck Grassley (R-Iowa).

For the report, investigators during a 15-month period reviewed the charitable activities and billing practices of 10 not-for-profit hospitals across the nation.  Grassley last year requested the information from the Cleveland Clinic, New York Presbyterian Hospital System, Advocate Health Care Network, Advocate Health and Hospitals and other institutions.  Investigators also examined cases of alleged abuse, interviewed community groups and reviewed studies by health care economists.

The investigators find:

  • Some hospitals have been taking advantage of IRS laws regarding tax-exempt status by offering some no-cost services but often providing little aid to the lowest-income residents in their communities.
  • In some cases, not-for-profits fail to inform patients that such aid is available.
  • In addition, some high-ranking hospital officials receive perks such as paid country club memberships and stays at expensive hotels, according to the investigation. 
  • Some for-profit hospitals provide "as much if not more charity care"
  • than some not-for-profit hospitals.

"All of this calls into question whether nonprofit hospitals deserve the billions in tax breaks they receive from federal, state and local governments," says Grassley.

Source: Kathleen Day, "Hospital Charity Care Is Probed; Investigators Find Nonprofits Overcharge or Deny Services," Washington Post, September 13, 2006.

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