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Medical Debt Grace Period at Mosaic Life Care

Tuesday October 6, 2015

Sen. Chuck Grassley of Iowa has a long history of making sure tax-exempt organizations fulfill their obligations under the tax law, beginning with his leadership of the Finance Committee with jurisdiction over taxes. In addition to his oversight, Grassley authored additional accountability measures for nonprofit hospitals that were enacted into law in 2010.  Since January, Grassley has been asking questions of a tax-exempt hospital in Missouri.   Mosaic Life Care was the subject of an investigative journalism report over suing low income patients to force them to pay their hospital bills, even when those patients reportedly were eligible for financial assistance and discounted treatment under federal tax laws.  According to the news reports, the hospital, in conjunction with its debt collection arm Northwest Financial Services, filed thousands of lawsuits to seek legal judgment against patients and garnish their wages rather than work with them on financial assistance.  After the news reports emerged, Mosaic said it was reviewing its billing policies.  Over the last several months, Grassley has continued to press the hospital to explain how it would revise its practices to fulfill its legal and ethical obligations to low income patients.  Now, the hospital is announcing a medical debt grace period, running for three months, to allow patients with an outstanding balance to apply for financial assistance, even if the hospital has subjected the patients to collection action and legal action. The hospital also has released a new financial assistance policy.  It said it is more widely publicizing the policy and making it easier for patients to apply for aid, among other positive changes.  Grassley made the following comment.

“The spirit and the letter of the law are pretty clear.  Tax-exempt hospitals are supposed to be in business to help low-income patients.  That means offering financial assistance and helping patients apply for it if they’re eligible.  It means working with patients instead of suing them.  It does not mean intimidating patients who should have received financial assistance with aggressive collection practices.  After a long period of discussion and correspondence with my office, and media coverage, Mosaic Life Care appears to be taking the right steps.  This is welcome, but results are what ultimately matter.  I plan to continue to talk with the hospital and ask for data after the financial amnesty period is over to check on the results.”   

A news account detailing the new policies is available here.

A link to the website detailing the Medical Debt Grace Period: