SPLC: Six hospitals in Louisiana and Mississippi violate regulations protecting low-income patients

The SPLC discovered that the hospitals, which are believed to benefit from a tax-exempt, nonprofit status due to their mission to serve patients regardless of income, are failing to comply with IRS regulations requiring such hospitals to maintain a financial assistance policy that outlines the assistance provided by the hospital as well as its billing and collection practices.

The hospitals are also failing to widely publicize their financial assistance policies – a failure that may deter the uninsured or underinsured from seeking necessary treatment at the hospitals. Several of the hospitals appear to be filing collections lawsuits against hundreds of patients who may not have been informed of possible financial assistance and the actions the hospital may take to collect debt.

“The regulations governing tax-exempt hospitals were put into place for a good reason,” said Sara Zampierin, SPLC senior staff attorney. “And that’s to ensure that no one has to forego medically necessary treatment because they are poor. If these hospitals are committed to serving all members of their communities, they must meet their obligations.”

Letters were sent to six hospitals that are believed to maintain 501(c)(3) tax-exempt status. The hospitals have three weeks to respond to the SPLC’s request to provide a compliant policy and make it widely available to the public. If the hospitals do not respond, the SPLC intends to file a formal complaint with the IRS.

“We hope we can work with the hospitals to address our concerns in a collaborative manner and bring their financial assistance policies into compliance,” Zampierin said.

The letters also asked that the hospitals review their records to determine whether any patients qualifying for financial assistance were subjected to unjust collection actions. The SPLC urged debt forgiveness in those cases.

The six hospitals contacted by the SPLC include:

• Lady of the Sea General Hospital – Cut Off, La.

• Terrebonne General Medical Center – Houma, La.

• East Jefferson General Hospital – Metairie, La.

• Magee General Hospital – Magee, Miss.

• Scott Regional Hospital – Morton, Miss.

  (A Rush Health Systems hospital)

• North Mississippi Medical Center – West Point – West Point, Miss.

  (A North Mississippi Health System hospital)

Scott Regional Hospital and North Mississippi Medical Center – West Point are part of hospital networks that consist of several hospitals that cover dozens of counties in Mississippi and Alabama. The SPLC’s letters note that the absence of a compliant financial assistance policy at one hospital – as well as the failure to make any financial assistance policy widely available to the public – suggests that other hospitals in the network may not be in compliance with regulations.