Politics makes strange bedfellows in fight against nonprofit hospitals

Sen. Chuck Grassley (R-Iowa) and Rep. Bobby Rush (D-Ill.) have formed an unusual alliance to ensure that tax-exempt hospitals treat patients without insurance.

Nonprofit hospitals receive tens of billions of dollars in tax benefits each year to offer medical assistance to patients who lack proper coverage. But some have curtailed this care to boost their bottom line.

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Grassley told The Hill there is a coordinated effort between his and Rush’s offices to crack down on hospitals that fail to provide this service but still claim the lucrative tax breaks. Work on the issue is being done at the staff level, and specifics about how the lawmakers will work together has not yet been determined.

“They [the lawmakers] agree the issue surrounding the tax-exempt status of nonprofit hospitals that requires a level of charity care needs to be examined,” Sharon Jenkins, Rush’s communications director, told The Hill.

She added that hospitals “have these exemptions for a reason and the reason is to provide a certain amount of care for people who can’t afford it.”

Grassley has tried for years to compel tax-exempt hospitals to provide a level of charity care that merits the tax breaks they receive. Rush entered the fray last year when he discovered that a tax-exempt hospital in his district, the University of Chicago Medical Center, refused to care for uninsured or poor patients, a practice known as patient-dumping.

One case involved hospital officials putting a child who had been mauled by a dog on the city’s subway, which carried him to a nearby hospital. Physicians at that hospital said the child needed major reconstructive surgery.

In other districts, tax-exempt hospitals have forced patients without proper coverage to pay for medical services upfront.

Rush was outraged upon hearing about these developments and walked across the Capitol to speak with Grassley about what he could do to clamp down on tax-exempt hospitals.

“When he came over to talk to us, we’d already been working on it [the University of Chicago case],” Grassley told The Hill. “He came over and wanted to work with us.”

Rush requested that the House Oversight Committee look into patient-dumping in a May 25, 2009, letter to Chairman Edolphus Towns (D-N.Y).

Towns has yet to respond to the letter.

“Congress has a duty to expend its power to mitigate and prevent this despicable practice from continuing in centers that receive federal funds,” Rush wrote in the letter.

The recently enacted health reform bill requires the IRS to conduct stricter oversight on tax-exempt hospitals. But staffers with Grassley and Rush say the provisions don’t go far enough to ensure that these centers provide adequate charity care.

Grassley contends a uniform definition for what constitutes charitable care would force tax-exempt hospitals to accept a broader swath of patients. The lack of a hard-and-fast rule has allowed these medical centers tremendous leeway in what they deem charity care.

“You know how ridiculous this definition of charity is,” Grassley said. “A lot of hospitals want to call charity when the federal government doesn’t pay 100 percent of Medicare; we pay 80 percent, they want the other 20 percent to be charitable care.”

As lawmakers seek revenue to fund their priorities, tax-exempt organizations could go under the congressional microscope to see whether the services they provide are different from those of their for-profit counterparts. If there is little distinction, these organizations stand to lose their tax status.