The midwest horror story of how a hospital gained the nickname “Heartless.”
NPR and ProPublica have been investigating the increase in so-called “wage garnishment” by credit card and other companies. For this story, we looked specifically at nonprofit hospitals and found the practice widespread in five different states around the country.
Nonprofit hospitals get huge tax-breaks — they are considered charities and therefore don’t pay federal or state income tax or local property tax. In exchange, they are obligated to provide financial assistance or “charity care” to lower-income patients.
Some nonprofit hospitals around the country don’t ever seize their patients’ wages. Some do so only in very rare cases. But others sue hundreds of patients every year. Heartland, which is in the process of changing its name to Mosaic Life Care, seizes more money from patients than any other hospital in Missouri. From 2009 through 2013, the hospital’s debt collection arm garnished the wages of about 6,000 people, according to a ProPublica analysis of state court data.
After the hospital wins a judgment against a former patient in court, it’s entitled to take a hefty portion of the patient’s paychecks going forward: 25 percent of after-tax pay. For patients who are the head of household, if they tell the hospital or court that information, the hospital can seize only 10 percent of each paycheck.
But Heartland, through the debt collection company Northwest Financial Services, often sues both adults in a household — garnishing one at the 10 percent rate and the other at the full 25 percent of their pay. The hospital also charges patients 9 percent interest, the maximum allowed under state law