When Nonprofit Hospitals Sue Their Poorest Patients
On the eastern edge of St. Joseph, Mo., lies the small city's only hospital, a landmark of modern brick and glass buildings. Everyone in town knows Heartland Regional Medical Center — many residents gave birth to their children here. Many rush here when they get hurt or sick.
Heartland Regional Medical Center is in the process of changing its name to Mosaic Life Care. People in St. Joseph, Mo., still refer to it as Heartland hospital — and several former patients say the hospital's debt collection tactics have earned it the nickname "Heartless Hospital."
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.
Nonprofit hospitals get huge tax breaks — they are considered charities and therefore don't pay federal or state income tax or local property tax. In exchange, they are obligated to provide financial assistance or "charity care" to lower-income patients. Some nonprofit hospitals around the country don't ever seize their patients' wages. Some do so only in very rare cases. But others sue hundreds of patients every year. Heartland, which is in the process of changing its name to Mosaic Life Care, seizes more money from patients than any other hospital in Missouri. From 2009 through 2013, the hospital's debt collection arm garnished the wages of about 6,000 people, according to a ProPublica analysis of state court data.
After the hospital wins a judgment against a former patient in court, it's entitled to take a hefty portion of the patient's paychecks going forward: 25 percent of after-tax pay. For patients who are the head of household, if they tell the hospital or court that information, the hospital can seize only 10 percent of each paycheck. But Heartland, through the debt collection company Northwest Financial Services, often sues both adults in a household — garnishing one at the 10 percent rate and the other at the full 25 percent of their pay. The hospital also charges patients 9 percent interest, the maximum allowed under state law.
Keith Herie is swamped in debt from medical issues he and his wife encountered starting about a decade ago. Heartland hospital is seizing 10 percent of his paycheck and 25 percent of his wife's wages, and has placed a lien on their home.
Read or listen at: http://www.npr.org/2014/12/19/371202059/when-a-hospital-bill-becomes-a-decade-long-pay-cut
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