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Sanction "Nonprofit" Hospitals who Profit off Indigent patients

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North Carolina’s hospital systems have developed a reputation for profiting off of their patients, driving up insurance premiums, and sending past-due accounts to collections agencies who use abusive, heavy-handed tactics to collect the debts. This investigative series by the News and Observer gives more intensive information on the issue.

The three largest hospital systems in the state, UNC, WakeMed, and Duke, have been selling their accounts that are 90 – 120 days past due, to ACS, an aggressive loan collection agency that harasses people even after bills are paid, threatens to place liens on their property and homes, and attempts to intimidate people into paying bills using strong-arm tactics.

At the same time these “non-profit,” federally-subsidized hospitals are contracting with this aggressive collection agency, they have been raking in record profits in the past few years. The News and Observer reported that:

“Nonprofit hospitals … are exempt from property, sales and income taxes, breaks worth nearly $800 million a year statewide. In return, federal officials expect them to provide a benefit to their communities, in part by providing care to those who can’t afford it.”

“Tax breaks granted to the nonprofits average around 4.4 percent of budgets… using taxes paid by for-profit hospitals. But most of the state’s hospitals that filed reports spent less than 3 percent of their budgets on charity care, and more than two-thirds spent less than the estimated value of their tax breaks.”

“In 2010, the most recent year broadly available, Duke’s three hospitals provided $64.1 million in charity care, or 3.3 percent of the budget. That year, Duke had an operating profit of $316 million, or 14 percent.

The result of this gross indulgence in fee inflation is that those North Carolinians who pay for their health insurance, are paying astronomical amounts for services that only cost the hospitals a fraction of the cost they pass off to us. The extreme need of hospital patients dictates that we are at the mercy of the hospital staff, and to be taken advantage of in this way is, at best, exploitation – at worst, it is a violation of the Hippocratic Oath.

This petition is directed to the North Carolina General Assembly.

We the people demand the following:
1) That a full investigation be made into the profits hospitals in North Carolina make, the inflation of fees for services, and the re-naming of services to enable doctors to make more profit off of insurance companies.
2) That hospitals in North Carolina who have failed to provide adequate charity care for the indigent, have their nonprofit status revoked and be blocked from eligibility for federal funds for a period of at least five years, during which time they must re-assess, re-align and re-structure their administration, fees and services to justify reapplication for nonprofit status and federal funds.
3) That hospitals in North Carolina are forever barred from contracting with private collection agencies to collect past-due accounts.
4) That hospitals in North Carolina be required to waive the fees of all patients who can document that they are unable to afford care, and for those patients who have insurance but can document that they are unable to cover their co-pay amounts.
5) That hospitals in North Carolina be required to report all profits to a permanent legislative commission and to the North Carolina Insurance Commissioner, annually, to determine if their profit margin merits an audit and/or reconsideration of nonprofit status.
6) That hospitals in North Carolina be required to give an estimate of services to patients and their families in all possible cases, prior to hospitalization, and to provide alternative payment plans for those patients and families who are unable to pay their bills upon release from the hospital.
7) That medical debt is never to be applied against a person’s credit history, as illness, catastrophe and emergency is beyond the patient’s control.

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