The $2 trillion dollar bailout passed by Congress — the CARES Act — is supposed to protect families and businesses struggling because of the COVID-19 pandemic.
The law also established an inspector general to ensure that corporations that access the $500 billion in CARES loans actually pay and retain their workers, rather than dole out executive bonuses or buy back stock. The idea was to protect vulnerable employees from being laid off.
President Trump has already stated that he won’t comply with the inspector general’s authority to oversee these loans. Bailed out airlines, for example, are telling their employees to expect layoffs, despite the law’s provisions.
Patients at bailed out hospitals, however, could be in even greater danger. That’s because the bill lacks virtually any accountability measures to protect them.
Nonprofit hospitals in particular, who are exempt from paying federal or local taxes in exchange for providing community benefit, have long been criticized by lawmakers for not doing their part to support healthy communities.
These hospitals also have a history of persecuting low-income patients for unpaid medical bills by garnishing their wages, placing a lien on their property for outstanding debt, or taking them to court.
Under the CARES Act, Secretary of the Health and Human Services Alex Azar has the power to disburse stimulus funds to hospitals. However, his plan for accountability is unclear. Secretary Azar should share his vision of accountability for hospitals that receive new federal funding.
Here’s my prescription.
As a condition for receiving funds from the CARES Act, Secretary Azar should prohibit hospitals from pursuing extreme debt collection measures against patients who are treated for COVID-19.
While IRS rules under the Affordable Care Act supposedly protect patients from these rapacious practices, the policy has gaps that leave America’s 30 million uninsured people particularly vulnerable to harsh forms of debt collection. And that number is certain to rise as unemployment skyrockets.
As a result, a stay in the hospital for COVID-19 could cost patients dearly. No family should have to worry about a hospital taking them to court as their loved one is connected to a ventilator.
Next, Azar should ensure that nonprofit hospitals that are bailed out commit to meaningful investments in community health.
To maintain their tax exemption, nonprofit hospitals are already required to invest in these efforts. These “community-benefit expenditures” can range from patient-focused spending, like providing free or discounted care, to community-focused spending on affordable housing for vulnerable populations, economic development, or child care programs.
However, hospitals spend much less on community-focused spending than they should, in part because the IRS fails to provide clear guidance to hospitals on how to show that these investments improve health. The administration should order the IRS to make their policy less burdensome in order to incentivize much needed community health investments.
To be sure, hospitals in need of funding should receive this critical assistance immediately. Their focus should be on saving lives, not on satisfying bureaucratic demands. But releasing unconditional, financial stimulus without adequate accountability measures in place is irresponsible — and could ultimately harm millions of vulnerable Americans.
We must demand that Secretary Azar uphold a higher standard of transparency and accountability than his boss.