Last week, Iowa Senator Chuck Grassley wrote a letter to the United States Senate Committee on Finance (the Letter) concentrating on nonprofit hospitals’ debt collection and financial assistance practices and price transparency. According to the Letter, Senator Grassley wants to strengthen the nonprofit hospital requirements under section 501(r) of the Internal Revenue Code and increase hospital price transparency for consumers.

Hospitals must comply with the requirements in Section 501(r) to obtain tax-exempt status under Section 501(c)(3). Section 501(r) was added to the Code by the Patient Protection Affordable Care Act ten years ago and placed additional requirements on hospitals that wish to maintain their tax-exempt status. The Letter mentions that nonprofit hospitals have been struggling to comply with the Code requirements, however, Senator Grassley advocates for strengthening these requirements to avoid nonprofit billing and debt collection practices that, in his opinion, violate the purpose of their nonprofit status.

The Letter summarizes the Senator’s previous correspondence with two nonprofit hospitals in Virginia and Tennessee requesting more information about their billing and debt collection practices and financial assistance policies. Since that correspondence, both hospitals have dismissed certain lawsuits against patients below a certain income level and revised payment arrangements with low-income patients.

The Letter also outlines the Senator’s previous correspondence requesting information about each hospitals’ price transparency, who pays the hospitals’ chargemaster prices, and the cost of treating patients including those diagnosed with COVID-19. Senator Grassley emphasizes one hospital’s response to his question about chargemaster pricing. The Virginia hospital states that primarily out-of-network payors and noncovered services are paid at full price, whereas each health plan contract has a different payment arrangement. Based on his correspondence with these hospitals, the Senator reiterates the need for greater price transparency, stressing that each patient needs to know how much their hospital visit will cost. With hopes for a COVID-19 vaccine on the horizon, the Senator’s Letter may prove to be a bellwether for Congress turning its attention back to nonprofit hospital’s billing and debt-collection practices and price transparency in the near future.

The Letter is available here.