Lawyers representing groups of uninsured and low-income individuals have filed civil class action lawsuits against not-for-profit healthcare systems in more than 20 states.
The lawsuits claim that the named healthcare systems violated their obligation as tax-exempt organizations to provide charity care. Plaintiffs contend that defendants 1) do not provide ample charity care; 2) use aggressive bill collection tactics; and 3) charge uninsured patients full price, which can be more than insured patients.
As the area's largest not-for-profit healthcare provider, Alegent Health has prepared the following answers to questions you might have about not-for-profit healthcare and about Alegent Health's charitable care.
Q: Is Alegent Health involved or named in these lawsuits?
A: No. Alegent Health has not been named and is not presently involved in any of the class action lawsuits that have been filed.
Q: What legal obligation does a not-for-profit healthcare system have to provide charitable services, programs and care?
A: A nonprofit healthcare system must provide a certain amount of charitable care each year. This generally includes, at a minimum, providing emergency room care without regard to ability to pay and offering a charitable care program for the poor and indigent.
Q: Why do some healthcare organizations receive tax-exempt status from the federal government?
A: The federal government recognizes the "promotion of health" as a charitable purpose. An entity organized for charitable purposes qualifies for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Tax-exempt status is essential to assisting healthcare organizations in achieving their charitable purpose of offering a broad array of activities and services that promote the health of the community.
Q: Why is not-for-profit healthcare an important model?
A: Not-for-profit healthcare organizations provide 85% of the healthcare in the United States. These not-for-profit healthcare organizations are devoted to the charitable purpose of promoting community health and care for patients regardless of their ability to pay. Without the not-for-profit healthcare system, many underinsured and uninsured patients would not receive the care they need.
Q: What does a not-for-profit healthcare organization need to do to maintain its tax-exempt status?
A: In order to maintain tax-exempt status, an entity must demonstrate it is organized and operated for charitable purposes such as the promotion of health. This is accomplished by providing services that promote the health of the community, providing emergency room care without regard to ability to pay, devoting available funds to enhance healthcare services in the community and offering a charitable care program for those in need. Without shareholders that require dividends, not-for-profit healthcare organizations devote their resources entirely to providing and improving healthcare.
Q: Does Alegent Health meet its obligations to provide charitable care in exchange for its tax-exempt status?
A: Alegent Health exceeds its obligation to provide charitable care as it provides emergency room care, without regard to ability to pay; it offers a generous charity care plan for patients who cannot afford to pay; and it strives to provide services that promote the health of its entire community. In the last year, over 6,500 uninsured patients obtained treatment at Alegent Health.
Q: Do low-income, uninsured patients pay 100% of the cost for medical care at Alegent Health?
A: No. Alegent Health provides direct financial assistance and charity care to low-income, uninsured and underinsured patients. We have a financial assistance program that offers assistance on a sliding scale, using the U.S. Housing and Urban Development income guidelines, which substantially reduces patient costs based on family income. In addition, our program limits catastrophic bills to 20% of a family's annual income, regardless of income level.
Q: How can someone who has no insurance coverage receive discounted or charitable medical care from Alegent Health?
A: Our financial assistance counselors will help them complete the necessary form to apply for assistance. An Alegent Health financial assistance counselor works in partnership with patients admitted without insurance to identify appropriate assistance with bills, including Alegent Health's own direct financial assistance program. Our focus is on treating people with respect and dignity as we heal everyone we serve.
Q: Do you use collection agencies to pursue payment from uninsured or low-income patients?
A: Yes. When financially able, every patient should expect to contribute to the costs of his or her medical care. When medical bills present a financial challenge, we work with individuals to achieve reasonable solutions to these challenges. To ensure that every patient is treated properly, we involve our Mission Services staff in selecting agencies to work with to ensure that any contact with our patients is handled in a way that reflects our Mission and values. We remain committed to our patients and their families. Each individual deserves respect and compassion, not only as we provide care, but throughout the billing and collections process.
Q: Has Alegent Health made any changes to its financial assistance and billing programs as a result of recent attention to charity care?
A: Alegent Health's financial assistance policies are routinely updated to better meet the needs of our patients and our community.
