Not so charitable; price gouging at nonprofit hospitals forces patients to seek nontraditional health care options

Katy Talento: ‘Very few nonprofit hospitals comply with federal law regarding price transparency — I wonder what they’re hiding?’

September 13, 2022

WASHINGTON D.C. — The majority of U.S. hospitals are designated as “nonprofit” tax-exempt organizations. These hospitals, key sellers of services in the “$4-trillion U.S. healthcare system,” often claim  religious affiliation or pedigree, charitable care and other community service required by federal law, but these claims are not always backed up by compelling evidence.

For instance, non-profit hospitals have also been found to spin off their own collection agencies and sue some their poorest patients for payment, even though the Internal Revenue Service (IRS) has warned against these practices. Despite the federal statute indicating “nonprofit hospitals should not engage in extraordinary collection actions before making a reasonable effort to determine whether someone is eligible for financial assistance,” these hospitals will pursue even their own low-paid employees with aggressive collection practices.

“People are often shocked when they discover the not-so-charitable truth about their local ‘nonprofit’ hospital,” said Katy Talento, executive director of Alliance of Health Care Sharing Ministries (The Alliance, ahcsm.org). “Very few comply with federal law regarding price transparency — I wonder what they’re hiding? Hospitals are the most notorious price-gougers in the health care industry, even and especially for patients with health insurance that’s supposed to protect them from such financial abuse. It’s no wonder that super-frustrated patients look for alternatives to traditional health insurance when trying to find a way to manage financial risk in health care.” 

In one of the nastier examples of price gouging, the LA Times exposed one nonprofit hospital for the unconscionable real time price mark up of 675%. The article said the arbitrary rapacious price increases are stunningly “routine,” and that hospital software actually includes the “formula” for price hikes. Despite these hostile tactics, there are ways to fight the system and obtain price transparency, according to Talento.

“Health Care Sharing Ministries are the off ramp; they can offer a potential alternative to the unholy alliance between tax exempt hospitals and health insurers that drives patient out-of-pocket costs higher and higher,” Talento said. “Hospitals will maintain predatory practices until enough of us push back. Members of Health Care Sharing Ministries often benefit from discounted cash rates for care, significantly lower than the so-called ‘discounts’ obtained from health insurers.”

Founded in 2007 and headquartered in Washington, D.C., the Alliance of Health Care Sharing Ministries is a 501(c)(6) trade organization representing the common interests of Health Care Sharing Ministry organizations which are facilitating the sharing of health care needs (financial, emotional, and spiritual) by individuals and families, and their participants. The Alliance engages with federal and state regulators, members of the media, and the Christian community to provide accurate and timely information on medical cost sharing.

To learn more about the Alliance of Health Care Sharing Ministries, visit www.ahcsm.org or follow the ministry on Facebook or Twitter.  

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