Nonprofit hospitals receive a tax-exempt status based on their work to serve the poor by addressing their medical needs. However, the medical billing practices of hospitals recently were called into question by a Consumer Financial Protection Bureau report, according to the National Association of Healthcare Access Management (NAHAM). (To view the report, go to http://1.usa.gov/1umJmpZ.)
The report examined medical debt in this country and found that 1 in 5 consumers, or 43 million individuals, have a negative mark on their credit report from a medical debt. The debt collections practices employed by hospitals raise several concerns including releasing private medical information covered by HIPAA to outside parties not involved in treatment, unfair billing practices that disproportionately impact low-income patients, a failure to provide and educate patients on available aid, the need for aid to retroactively cover eligible medical costs, and the legality of nonprofit hospitals suing their poorest patients.
A recent NPR story highlighted the issues that arise for low-income patients when nonprofit hospitals sue for unpaid medical bills, NAHAM said. (To view the NPR story, go to http://n.pr/1AGp81K.) In addition to the arbitrarily higher prices that many low-income patients are charged for medical treatment, the debts associated with their medical care negatively impact nearly every area of their lives. Medical debts reported to credit agencies lower credit scores which, in turn, raises the prices for many basic needs such as car insurance, mortgages, credit cards, and loans. Additionally, some employers examine the credit report in the hiring process. A low credit score or history of medical debt might negatively impact individuals’ opportunities to obtain jobs because they are viewed as irresponsible or the employer thinks they will not be reliable due to the medical issues insinuated in the report.
Resources to help those with medical debt may be found at the following websites: