M.D. Anderson forced to defend charitable care record

University of Texas M.D. Anderson Cancer Center's rep as a charitable institution has been under fire since at least April, when a Wall Street Journal article reported on a patient who was required to pay $105,000 in cash up front to receive cancer treatment. The story did a number not only on the institution, but also not-for-profit hospitals generally, who were already under pressure from legislators to prove that they deserved their tax exemption.

Now, the other shoe has dropped for the Texas healthcare facility. Sen. Chuck Grassley (R-IA) has been questioning officials at M.D. Anderson vigorously, asking for details on its relationships with insurance companies, collection policies, fundraising policies and of course, its charitable care efforts. The hospital, in defending itself, told Grassley and his team that it spent 7.6 percent of its budget on charitable care in 2007, or about $49 million. That's down from more than $86 million in 2004, a drop leaders attribute to more careful screening.

As you may know, Grassley has been investigating non-profit hospitals for years. In 2005, he sent letters to 10 of the country's largest non-profit hospitals questioning whether they provide public benefits equal to the subsidies they receive. Grassley is considering filing a bill requiring tax-exempt hospitals to provide a minimum amount of charitable care (possibly 5 percent), as well as setting new standards for bill-collection practices and other financial matters.

To learn more about Grassley's inquiry:
- read this Houston Chronicle piece

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