Casting Out Devils

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On Health Insurance, Non-Profit Hospitals, Cabbages, and Kings

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The Walrus and the Carpenter

The Walrus and the Carpenter (Public Domain)

Update 2/12/15:  Coincidentally, Memorial-Hermann’s billing department called to offer me a 50% discount off the total hospital bill for self-pay.  This is probably not a result of seeing this article, which was only published one day previous.  I am gratified to have received this fair offer, however belated.  ~Author

Allow me to relate, for the public record, my experience, from a financial standpoint, as a person with no health insurance receiving emergency medical care in the Texas Medical Center, Houston. On July 21, 2014, I entered the emergency room in the small town of Liberty, Texas, experiencing what was determined to be hypotension (low blood pressure) and bradycardia (low pulse rate). For several days, I had been unable to walk at a normal pace or otherwise exert myself without getting dizzy and beginning to black out. I was transported by county ambulance to the Memorial-Hermann Heart and Vascular Institute in the Medical Center. I spent, to my recollection, 3 days in the ICU, under observation, and afterwards was transferred to an identical room, but one not classified as Intensive Care. My treatment culminated in the placement of a heart pacemaker. I was finally released from the hospital on the evening of July 26.

On July 22 of my stay, I was visited in ICU by a Financial Counselor employed by the hospital, who helped me to fill out a Financial Assistance Screening Form. He further instructed me to send in my previous year’s IRS Tax Return as proof of financial need. I mailed this proof the weekend of August 2, but shortly thereafter received a letter from the Financial Counselor, dated August 6, denying financial assistance on the basis of failing to provide proof of income. This was obviously sent before receipt of my letter containing proof, and a scant 11 days after my release from the hospital.

As I began to receive bills from the various medical providers involved in my care, my research revealed that medical providers routinely allow for a discount of 40 to 50 percent to insurance companies. Moreover a self-pay patient is well within his or her rights to request an equivalent discount for cash payment up-front. I therefore began to request a self-pay discount from all providers, the results of which are shown in the table below. For the most part, the providers were not surprised at the request, and readily offered a substantial discount off the billed price in return for prompt payment.

The major exceptions to this accommodation were those submitting the two largest bills, UT Physicians and Memorial-Hermann Hospital. After months of wrangling and sending certified letters, including an offer to pay 60% of the bill promptly, UT Physicians finally sent a bill, dated January 24, 2015, reflecting a 34% discount.






UT Physicians





Texas Heart Rhythm





Texas Heart Rhythm (follow-up)





Liberty County EMS (A/R Concepts, Inc.)





Liberty-Dayton Reg. Med. (emergency room)





Houston Cardiovascular Associates (follow-up)





Physicians Billing Service





Memorial Pathology Consultants





Milwaukee Radiologists





Memorial-Hermann Hospital






Memorial-Hermann Hospital, on the other hand, has consistently demanded payment in full within a short payment period, an utter impossibility under my present circumstances. Their billing department has discouraged partial payment (though they took the $4,000 paid to date), failed to offer any kind of payment plan, and refused to negotiate any kind of a discount. Their billing officials, those authorized to discuss and negotiate arrangement, remain bastioned and anonymous behind an opaque automated phone system.

It would appear that M-H has every intention of holding out for payment of the full, unmitigated amount they have assessed, and proceding toward a collections lawsuit. Attorney Robert Painter of Houston recounts the case of Ignacio Alaniz, a low-income worker injured in a car crash and life-flighted to Memorial-Hermann. Painter remarked, “We believe that Memorial Hermann’s billing practices regarding the uninsured are unconscionable and violate the Deceptive Trade Practices Act. Why should a hospital try to collect from someone without insurance double or more what an insured patient would pay for the exact same care?”


Dianna Wray, in a Houston Press article, also reported on this case:

Attorney J. Thomas Black notes that hundreds of patients are sued by tax-exempt Memorial-Hermann every year. “They are the only hospital that I can recall that actively sues for unpaid hospital bills,” he wrote. According to Black, filing for personal bankruptcy might be the only recourse for low-income patients unable to pay up-front.


The hospital’s own billing documents state:

Memorial Hermann Health System recognizes there may be times when patients will have difficulty paying for the services provided. The Hospital provides a discount to qualified patients with limited income who have no insurance or who have used all of their health insurance benefits. Payment from all possible sources must be exhausted before a patient can qualify for financial assistance. We can help you apply for free or low-cost insurance, if you qualify.

To find out if you qualify for partial or fully discounted medically-necessary hospital services, you must apply for financial assistance and provide supporting documentation.

To date, however, M-H has offered none of these allowances, apparently based on the Financial Counselor’s initial denial of assistance.

According to reporter Wray,

Memorial Hermann is a nonprofit, but the hospital system’s annual revenue in fiscal year 2010, according to the most recent annual report filed with the U.S. Department of Health and Human Services, was more than $2.9 billion. Expenses came in at under $2.7 billion, leaving more than $228 million in revenue on the table, according to the report. Even after subtracting the $582 million Memorial Hermann donated in care — the bulk of it made up of unreimbursed medical expenses from Medicaid patients — the nonprofit still recorded a profit of more than $200 million and an endowment of more than $3.8 million. Memorial Hermann President and CEO Daniel Wolterman was paid a salary of close to $2.2 million that year.

Further in Wray’s article, legal aid attorney Tariq Gladney described M-H lawyers being “like cowboys in an Old West shootout, unwilling to back down and acknowledge that they wouldn’t be collecting the debts. Memorial Hermann dropped the cases in every instance, but Gladney is still mystified as to why the hospital’s lawyers pursued these suits in the first place.”

“I have yet to see another hospital do this,” Gladney is quoted. “It doesn’t make much financial sense. Most of my clients are judgment-proof.”

Paul Kiel of ProPublica writes that the same thing is happening in Alabama:


Kiel concludes that these aggressive actions by tax-exempt hospitals are the result of weaknesses and loopholes in state laws, yet there is some promise of future relief when pending laws come into effect:

Senator Charles Grassley, who has helped investigate the tax-exempt status of non-profit hospitals in the past, was shocked that hospitals were still aggressively pursuing patients who could not afford to pay. In particular he cites Mosaic Life Care, which in various cases “failed to identify patients who would qualify for financial assistance and who have since been subject to abusive billing and collection practices,” as Kiel quotes him. “The practices appear to be extremely punitive and unfair to both low income patients and taxpayers who subsidize charitable hospitals’ tax breaks.”


In my case, I am perfectly willing to pay, as I am able, reasonable remuneration for services rendered.  I consider my self-pay status to warrant the offering of a substantial discount, commensurate with that offered to insurance payers; and as a matter of necessity, moreover, require the extension of a reasonable payment plan.  Keep in mind that as an emergency patient, I had no opportunity to shop around for healthcare, and was helpless except to accept M-H’s aid and recommendations.  Further, as a low-income ordained minister, I remain unable to afford conventional health insurance.  The present state of affairs could hardly be solved short of filing for personal bankruptcy, in which case M-H would receive nothing more than the growing ill-will of the public.

© 2015 Paul A. Hughes


Written by biblequestion

February 11, 2015 at 7:38 PM