Mosaic Life Care (originally called Heartland Regional Medical Center) in St. Joseph, Missouri, sued thousands of people over the past few years. The nonprofit was suing for medical bills and getting wages garnished.
And there's another reason everyone knows this place: Thousands of people around St. Joseph have been sued by the hospital and had their wages seized to pay for medical bills. Some of them, given their income, could have qualified to get their bill forgiven entirely — but the hospital seized their wages anyway.
NPR and ProPublica have been investigating the increase in so-called "wage garnishment" by credit card and other companies. For this story, we looked specifically at nonprofit hospitals and found the practice widespread in five different states around the country.
The investigation NPR and ProPublica embarked on was the result of Mosaic Life Care’s nonprofit status. Hospitals that have nonprofit status are tax-free because they are supposed to provide financial assistance and/or “charity care” to patients in need. Heartland wasn’t keeping up their end of the bargain. NPR gives the account of Keith Herie, who was making $30,000 a year as a truck driver. His wife Kathleen Herie was a stay-at-home mother with the couple’s two children. When she was forced to get an emergency appendectomy, Mosaic really put in the screws.
That operation meant upwards of $14,000 in medical bills. It was a staggering debt for the Heries. They say the hospital told them they could apply for financial aid, but when he went to inquire about that, Keith says, "they basically told me I made too much."
Just a few months after the operation, the hospital expanded its charity care policy. The Heries, given their income, would have qualified under the new policy. But the hospital didn't make the change retroactive.
Over an eight-year period, Mosaic took around $20,000 from Keith Herie’s wages. After Herie’s story was published, his remaining $26,000 of debt was settled for $8,000. But there were many others with equal or worse stories connected to Mosaic. This is now changing.
But after an investigation by NPR and ProPublica prompted further scrutiny by Sen. Charles Grassley, the hospital overhauled its financial assistance policy late last year and forgave the debts of thousands of former patients.
The hospital "deserves credit for doing the right thing after its practices were scrutinized," Grassley, R-Iowa, wrote last week in a letter to his Senate colleagues, "but it should not take congressional and press attention to ensure that tax-exempt, charitable organizations are focused on their mission of helping those in need.”
While this is good news and Mosaic has created a new policy allowing a “grace period” where people can have their debt reevaluated, there’s still a lot left to be desired.
In remarks late last year to the St. Joseph News-Press, the hospital's president and CEO Dr. Mark Laney said a lesson the hospital learned from the scrutiny of its collection practices was to be more "proactive" in identifying patients who qualified for aid. "We were doing the medically right thing for the person, but on the financial responsibility part, we were doing the wrong thing," he said.
Not being proactive is a widespread problem for hospitals, according to a national study of hospitals by the University of Michigan Institute for Healthcare Policy and Innovation last year. The institute found that fewer than half of the 1,800 hospitals it studied were notifying patients about their financial assistance policy before attempting to collect unpaid bills.
The biggest problem here is that the agency that would be able to put true financial pressure on these nonprofit hospitals would be the IRS, and as with any institution that could actually benefit the people, the Republican Party is dead set on underfunding, understaffing, and then blaming them for not performing. These are hospitals that are supposed to serve their communities’ health needs. Here’s an example: Deaconess Hospital in Evansville, Indiana, that has been found to file around 4,000 lawsuits every year.
The hospital's aggressiveness has come despite its very robust finances. In 2015, the last publicly available report, the hospital disclosed a profit of $150 million. The hospital's CEO Linda White was paid $1.74 million.
In a response to questions from ProPublica, the hospital said in a statement that it made a "proactive" effort to "work with patients to ensure that financial options are explored from the beginning."
Now that they’ve been outed in this investigation, Deaconess too, is promising policy changes. We will see, won’t we.