Senator Grassley Continues to Spotlight Hospital Practices at Mosaic Life Care
Background
On January 16, 2015, Senator Grassley wrote a letter to Dr. Mark Laney, President/CEO of Mosaic, as well as the hospital’s administration, requesting certain information regarding Mosaic’s financial assistance policies in an attempt to determine if the hospital was failing to meet certain community benefit standards. Senator Grassley requested information pertaining Mosaic’s community benefit practices in an effort to ascertain whether or not Mosaic was compliant with certain community benefit standards.
Senator Grassley felt compelled to question Mosaic’s financial practices after various reports of rather aggressive billing practices had been made. ProPublic and National Public Radio reported that Mosaic allegedly sued a large number of low-income individuals for delinquent medical bills instead of working with patients and offering them reasonable payment plans for medical care. Senator Grassley’s letter noted that “Reports detail a number of instances where Mosaic failed to identify patients who would qualify for financial assistance and who have since been subject to abusive billing and collection practices. The practices appear to be extremely punitive and unfair to both low income patients and taxpayers who subsidize charitable hospitals’ tax breaks.”
Under the regulations developed in Internal Revenue Service Revenue Ruling 69-545, which is known as the “Community Benefit Standard”, hospitals are judged on whether they promote the health of a broad class of individuals in the community. In addition to Revenue Ruling 69-545, Internal Revenue Code (“IRC”) §501(r) was introduced under the Affordable Care Act (“ACA”) and includes requirements that hospital facilities must follow in order to maintain tax-exempt status under IRC §501(c)(3). The final regulations were published in the Federal Register on December 31, 2014.
Mosaic’s Response
Over the past year, Senator Grassley has continued to question Mosaic regarding proposed changes related to their financial assistance practices and billing policies. In its continued response to Senator Grassley’s inquiries Mosaic has revised its Financial Assistance Policy (“FAP”) to be compliant with IRC §501(r). As noted in Mosaic’s FAP “No account will be subject to collection actions within 180 days of issuing the first post-discharge statement and without first making reasonable efforts to determine whether the patient is eligible for financial assistance.” Additionally, Mosaic is doing more to widely publicize the FAP by making it available online, mailing copies, free of charge, to individuals who request it and providing paper copies, free of charge, at the reception desk. In addition to widely publicizing the FAP, information regarding the availability of Mosaic’s financial assistance is included on every billing statement and provided at registration for all uninsured patients.
In his response to Senator Grassley’s inquires, Dr. Mark Laney noted “ Our organization has sought to go above and beyond the requirements of the law for community benefit by embracing the guidelines that have been set forth by The Catholic Health Association of the United States (CHA) for reporting and defining community benefit. Using the CHA guidelines, nearly 8 percent of our net patient revenue is dedicated to community benefit. Mosaic Life Care also ranks among the top hospitals in Missouri for community benefit as reported by the Missouri Hospital Association (MHA). In addition, the American Hospital Association sponsored a “Schedule H Project Benchmark Report”, prepared by Ernst & Young, LLP and published in June of 2014, which compared the Schedule H charity care and other community benefits reported to the IRS by 587 similar sized hospitals. In this report, the amounts reported for Mosaic Life Care are above the national averages.”
Conclusion
While it is clear that Mosaic is making an effort to become compliant with Senator Grassley’s requests and IRC §501(r), Senator Grassley is not fully convinced and has stated “The spirit and the letter of the law are pretty clear. Tax-exempt hospitals are supposed to be in business to help low-income patients. That means offering financial assistance and helping patients apply for it if they’re eligible. It means working with patients instead of suing them. It does not mean intimidating patients who should have received financial assistance with aggressive collection practices. After a long period of discussion and correspondence with my office, and media coverage, Mosaic Life Care appears to be taking the right steps. This is welcome, but results are what ultimately matter. I plan to continue to talk with the hospital and ask for data after the financial amnesty period is over to check on the results.”
It is imperative that all tax-exempt hospital facilities realize the validity of this investigation and ensure that they are doing everything they need to in order to be fully compliant with IRC §501(r). People are paying attention now, more than ever before, to the financial assistance policies and billing/collection practices of tax-exempt hospitals and the penalties for non-compliance can be severe.
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