Kline: Nonprofit hospitals have few complaints

? Nonprofit hospitals in Kansas have generated relatively few complaints about how they focus on their mission to serve the needy, Kansas Atty. Gen. Phill Kline told a Senate committee on Wednesday.

Kline, who formed a task force this year to investigate billing and collection practices at nonprofit hospitals in the state, said he is working with nonprofits to develop a “best practices” model to make sure the hospitals don’t compromise charity care.

Lawmakers on the Senate Finance Committee invited Kline to testify about his investigation as they examine whether nonprofit hospitals, which reap billions in tax breaks each year, are justifying their tax-exempt status.

“My task force’s tentative conclusion is that the lower-than-expected level of complaints about the Kansas health care delivery system is a reflection of the integrity of persons manning those seemingly well-functioning systems,” Kline said.

But he said some nonprofits have developed policies over time that can conflict with their intended missions. About 85 percent of the nearly 5,000 hospitals in the nation are nonprofit.

The committee is responding to widespread complaints around the country that uninsured patients – about 46.6 million Americans – with the fewest resources often face hospital bills much higher than what an insurance company would pay for the same treatment.

Many nonprofits, in turn, use aggressive collection agencies that hound patients to make bill payments without informing them of charity services that could ease the burden.

“As the responsibility for collection is further removed from the hospital itself, it is further removed from the mission,” Kline said. “Oftentimes, outside contracts provide collection agencies with means and methods the hospital themselves would not agree with.”

The Kansas Hospital Assn. recently endorsed a “best practices” model hammered out with Kline’s task force that addresses excessive billing rates, charity care, collection practices, consumer education, visitation policies and financial assistance.

“It is important that these charitable institutions remain integral to and focused on serving those in need,” Kline said.

Nancy Kane, a Harvard University management professor, testified that Congress should act to set higher standards for nonprofit hospitals to earn federal tax exemption. Those could include giving medical care discounts based on a patient’s income, educating patients about charity and discounted care and justifying to the Internal Revenue Service their debt collection practices.

But Kevin Lofton, chairman-elect of the American Hospital Assn., urged lawmakers not to change the standards governing tax exemption for nonprofit hospitals.

The organization’s board this year approved a policy to make price information easier to understand and direct patients to more information about financial assistance.

In May, the Catholic Health Assn. released its own set of guidelines for measuring and documenting hospital community benefits. About 90 percent of its member hospitals have adopted the guidelines.