I have been hearing some crowing lately about the failure of Richard Scruggs, et al, to gain any traction with their federal lawsuits alleging that not-for-profit hospitals bilk the uninsured. I don't divulge sources, so I won't say who's doing the trash-talking, but I will repeat what I told them: Scruggs may be colorful, but he isn't the real story.
Yes, the Mississippi class-action gambler is taking a beating in federal court. Even his lone settlement, with North Mississippi Health Services in Tupelo, has collapsed at his feet. Now Scruggs and friends have slinked off to state courts to try to improve their luck. Already an Oregon judge has denied a motion by Legacy Health System in Portland to throw out the case against that system.
We don't know what juries will make of such complex cases, but it may not matter all that much. When governments get involved at the level we are seeing in Washington and state capitals, not-for-profits hoping to protect their tax-exempt status are going to be wishing they were back in court. Already, Minneapolis-based Fairview Health Services cried "uncle" when Minnesota Attorney General Mike Hatch put out a detailed report that alleged it hounds patients for payment. More recently, Illinois tax officials recommended dropping the property tax exemption of the Carle Foundation, Urbana, alleging that Carle overcharges the uninsured, spends little on charity care and allows a for-profit physician group to run many of its services.
In Washington, a multipronged set of investigations is ratcheting up the pressure on not-for-profits to do much more than sign the American Hospital Association's voluntary pledge to think nice thoughts about the uninsured.
The House Energy and Commerce Committee is seeking the records of the 10 largest hospital companies for details on the bills they sent to certain groups of patients treated at their facilities, as part of its probe of uninsured billing practices. House Ways and Means Committee Chairman William Thomas (R-Calif.) is continuing his own investigation into charitable organizations. Senate Finance Committee Chairman Chuck Grassley (R-Iowa) says he will attempt to enact legislation tightening federal oversight of not-for-profits as soon as possible. The Internal Revenue Service, an agency that had been doing little to rein in practices such as excessive compensation and double-dealing by boards, recently stepped up its enforcement actions.
As commentary author John Bagnato notes on p. 24 of this week's issue, some large for-profits have already taken concrete steps to ease the pressure on uninsured patients, even if it's debatable that they provide enough charity care overall. We know a handful of not-for-profits have also instituted better policies on treating the uninsured, but the time is ripe for the industry as a whole to start taking the role of community service provider more seriously.
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The nominations are now open for this year's Up & Comers recognition program. The program, co-sponsored by Witt/Kieffer, an Oak Brook, Ill.-based executive search firm, honors rising young stars in the healthcare management field. Last year's recipients, chosen from a pool of 131 nominees, were profiled in the Sept. 20, 2004 issue (p. 22). Nominees must be 40 years of age or younger. To participate in this year's program, please submit the candidate's resume along with a letter of no more than three double-spaced pages outlining the nominee's credentials, accomplishments and leadership qualities. Each submission must include a color photo of the nominee as well as his or her age. Please send the material to Up & Comers, c/o David Burda, Editor, Modern Healthcare, 360 N. Michigan Ave., Chicago, Ill., 60601. The deadline for nominations is July 11, and the winners will be announced and profiled in the Sept. 19 issue.