Nonprofit hospital accused of charity care violations

The controversy surrounding whether nonprofits deserve their tax-exempt status continues with a new lawsuit, claiming Chicago's Swedish Covenant Hospital sidestepped charity care regulations.  

In a lawsuit filed yesterday, two low-income, uninsured patients accused the not-for-profit hospital of failing to provide charity care services, the Associated Press reported.

The hospital faces charges of unfair practices under the state's consumer fraud law and could owe $50,000 in punitive damages.

At issue are complaints that Swedish Covenant lost multiple financial assistance applications from one patient and threatened to send her bill to collections, and that the hospital wrongly told another patient she didn't qualify for assistance and demanded cash payment, the article noted.

Tax exemptions for nonprofit hospitals in Illinois have been under close scrutiny. Last year, the state revenue department denied three hospitals tax exemptions for failing to offer enough charitable care.

Other critics have argued that some nonprofit hospitals have been gaming the system, delivering minimal levels of charity care below their for-profit counterparts.

With more nonprofits landing in hot water, a charity care advocacy group is calling for a universal financial assistance application for all Illinois hospitals, as well as an enhanced reporting system to prevent nonprofit hospitals from violating the law, the AP noted.

However, the issue gets more complicated as federal law and some state laws don't require nonprofit hospitals to provide certain amounts of charity care and community benefits to qualify for tax exemptions, FierceHealthcare previously reported.

To learn more:
- here's the AP article