Nonprofit Hospitals Criticized - Tax-Exempt Hospitals' Practices Challenged

TUPELO, Miss. -- When Tim Gardner was born at the hospital here 53 years ago, it was just "one little building on the hill" in a town best known as Elvis Presley's birthplace.

From those humble beginnings, North Mississippi Medical Center has grown into the largest non-metropolitan hospital in the country, a booming enterprise with a complex of glass and marble buildings and 40 satellite clinics stretching into Alabama and Tennessee. The company, incorporated in Delaware, has nearly $300 million in the bank and "exceptional profitability," according to one Wall Street rating agency.

And it pays no taxes. As one of 4,800 nonprofit U.S. hospitals, North Mississippi Medical Center is exempt from federal, state and local taxes in return for providing care to "charity patients."

But when Gardner, who is uninsured and suffers from heart trouble, asked for more time to pay off a $4,500 bill, the response came in the form of a summons. The hospital sued him for the balance plus $1,100 in legal fees.

Now Gardner and hundreds like him are at the center of a nationwide battle over whether nonprofit hospitals -- often flush with cash, opulent buildings and high-paid executives -- are fulfilling their mission as charitable institutions. Since last spring, a phalanx of trial lawyers who made millions suing asbestos makers and tobacco companies have been targeting tax-exempt hospitals, accusing them of gouging the poor.

"I was paying the best I could," said Gardner, who on his $18,000-a-year cook's salary had managed to pay $1,000. "I'm not trying to run. At the end of that week I was going to pay them some more."

"I was paying the best I could," said Gardner, who on his $18,000-a-year cook's salary had managed to pay $1,000. "I'm not trying to run. At the end of that week I was going to pay them some more."

I am familiar with this scenario. In a 30 day window of "no coverage", I figured I was safe. I was healthy, 28 years old...... no problems. I had just quit one job, and started another. Insurance is for things you don't expect..... an auto accident, a housefire, an emergency appendectomy......

"Since last spring, a phalanx of trial lawyers who made millions suing asbestos makers and tobacco companies have been targeting tax-exempt hospitals, accusing them of gouging the poor."

There is some merit to this claim. Hospitals charge one rate for people with health insurance, and charge a higher rate for those who don't have insurance.

I'm familiar with the scenario too. I was the Patient Accounts Manager in a supposedly not-for-profit hospital and it made me sick.

We sued a guy who worked as a dishwasher at the local truck stop and had three kids but when one of the city "elite" would call in and opine that their bill was too high we wrote it off.

As to Charity, that was a joke. Basically, we didn't do up-front charity. Just before people were going to go to collections we LET (not suggested) people fill out charity applications. If they met the poverty guidelines we would write it off to charity. Of course, you might be surprised how many of the "Elite's" college-aged kids fell into that category.

It ended up OK, as I was leaving I turned them in for Medicare fraud and they had to make a settlement.

Good for you! Unfortunately, I doubt that the hospital's malpractice was fully explained to the public -- or even that the local newspaper would have run the story if they had it given them on a silver platter. But sometimes, the curtain parts and the public gets a glimpse.

About a year ago, the Orlando area nearly lost its prime emergency trauma center due to doctor demands for more money, with the largest area nonprofit hospital claiming that it needed a few million more from the taxpayers because it had no money available. After a burst of doctor and hospital contrived publicity, a panel was appointed by the county to find a solution. Contrary to expectations, the panel had a few honest people on it.

It was soon learned that the hospital was flush with cash, with millions in uncommitted reserves, and that the doctors involved were greedy and extortionate in their demands. They were getting more than a thousand dollars a day for simply being on call, and some of them were earning several hundred thousand a year from that and from hospital fees alone, with hundreds of thousands more from private practice. To the extent that the trauma center had suffered losses, it was due to accounting practices and the ever expanding flow of illegal aliens clogging the emergency room.

Why was there a crisis? A handful of doctors were demanding major pay increases. One trauma surgeon who was a leader of the group said that he was entitled to be paid like Michael Eisner and referred to the cost of his new home, his twin engined airplane, and college tuition for his kids. Once the newspaper got the facts out, the doctors settled for much less than they asked for at first and most of that came from the hospital. Absent the news coverage, I have no doubt local and state politicians would have forked over a large chunk of taxpayer cash rather than be blamed for letting the public lose the trauma center.

Private jets, high style 'Management Meetings', opulent Headquarters, preferential treatment for the well-connected, lavish pay and benefit packages for the executives? What is the news here? This description could apply to most of our private corporations and ALL of our Governmental Entities not just so-called Non Profit Corporations.

IMO The term 'Non Profit' is a scam, yet another way of obtaining favorable tax treatment (AKA transferring costs to taxpayers) as a means of reducing costs and rewarding the insiders.

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