NPR: … .When Nonprofit Hospitals Sue Their Poorest Patients

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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.

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.

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.
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