Nonprofit hospitals agree to operate for charitable purposes in exchange for exemption from taxes. As financial pressures facing hospitals have intensified, the business decisions of nonprofit hospitals are being challenged by the Internal Revenue Service, state attorneys general, and patients. Uninsured patients have joined class-action lawsuits arguing that nonprofit hospitals are abandoning their charitable missions and accusing them of overcharging uninsured patients and of using aggressive debt-collection measures when uninsured patients cannot pay their bills.
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Studdert et al. (2007) studied this question.