December 05,2019

Grassley Presses Memphis Hospital on Tax-Exempt Obligations

Washington – Senate Finance Committee Chairman Chuck Grassley (R-Iowa) wrote to a Memphis, Tennessee hospital regarding a recent news report outlining its potential failure to live up to its legal obligations as a tax-exempt organization.
Methodist Le Bonheur Healthcare is tax-exempt and therefore must serve community health needs, provide financial assistance, limit amounts charged for medically-necessary care and refrain from extraordinary collection actions against patients eligible for financial assistance.
According to a recent MLK50 news report, “Methodist Le Bonheur Healthcare is among the least generous in Tennessee when it comes to charity care and does not offer free or highly discounted care.”
“Unfortunately, I have seen a variety of news reports lately discussing what appear to be relentless debt-collection efforts by various tax-exempt hospitals, including Methodist Le Bonheur Healthcare. These efforts raise questions about how Methodist Le Bonheur Healthcare, and other tax-exempt hospitals, are complying with these requirements,” Grassley wrote.
According to a review of the Shelby County General Sessions Court docket conducted by Grassley, it appears that Methodist Le Bonheur Healthcare filed 1,337 suits against patients for hospital debts in 2017, 1,380 suits against patients for hospital debts in 2018, and 585 suits against patients for hospital debts in 2019 through June 21.
In his letter, Grassley raises several questions regarding the hospital’s debt-collections history and process, charity care and financial assistance offered, patients’ rights and transparency guidelines, potential overcharging and process for determining its prices.
Earlier this year, Grassley announced he was renewing his probe of non-profit, tax-exempt hospitals. Grassley has been a leader in Congress in the effort to lower health care costs, recently introducing sweeping, bipartisan legislation to lower prescription drug prices. Grassley also recently wrote to UVA Health System in Charlottesville, Virginia with similar concerns.
In 2015, Grassley conducted an investigation into the Mosaic Life Care hospital system, which was suing low-income patients to force them to pay their hospital bills even when those patients were eligible for financial assistance and discounted treatments. As a result of that investigation, Mosaic Life Care established a three-month debt forgiveness period in which patients could apply or re-apply for financial assistance, forgave the debt of 5,070 patients, and hired more employees to help low-income patients apply for financial assistance.

Grassley’s full letter can be found HERE.