When Deborah Hernandez went to the hospital in December 2023 with abdominal pain, she wasn’t expecting a cancer diagnosis.
However, doctors told her that she had ovarian cancer and needed 14 rounds of chemotherapy. So she quit her job at the elementary school where she worked with special education students.
“Children at school will carry a lot of bacteria,” Hernandez said. “I couldn’t go to work because I didn’t have any white cells to fight bacteria.”
It relied solely on Social Security to cover her expenses, leaving her without a paycheck.
“I have to sit down and think who’s going to pay,” Hernandez said. “I have to turn on the lights, the water runs and the gas is on. And then what do I do? If I run out of money, it just goes out.
When I-Team first spoke to Hernandez, she told us that her medical costs had skyrocketed past $300,000. Medicare covered much of that, but she still faces out-of-pocket costs, including a $315 bill from Texas Health Harris Methodist Hospital in Fort Worth.
Hernandez faxed a charity care application to the hospital for relief. She says a few days later someone from the hospital called her to tell her she shouldn’t fax her in the application and called her to let her know that it was denied.
“It’s a lot of stress,” Hernandez said. “Do you ever wake up in the middle of the night and wonder how you’re planning on getting out of this debt?”
How Charity Care Works
One in four Texans suffer from medical debt. Charity Care is supposed to provide help. In exchange for large tax cuts, nonprofit hospitals are supposed to help patients who cannot afford to pay their bills.
Texas nonprofit hospitals benefit more than $1.8 billion in tax benefits per year, according to IRS data. In return, the state’s 127 nonprofit hospitals provided $9.1 billion in community benefits in 2022, according to the Texas Hospital Association. That amount includes $576 million in charity care than hospitals are the common industry standard.
Texas is one of five states that set the minimum community benefits. The Texas Hospital Association also says that Texas “prides itself on one of the country’s toughest charity laws,” but state hospitals “are well beyond their legal obligations.”
However, in recent years the system has been under scrutiny.
System under investigation
CBS News Texas I-Team reviewed more than half a dozen independent reports on charity care provided by nonprofit hospitals. Some, including those from the Baker Institute, have found that nonprofit hospitals in Texas “providing relatively high levels of charity care compared to other regions.”
Others have come to another conclusion. “Non-profit hospitals enjoy the benefits of tax-free status while not providing proportionate amounts of community benefits through charitable matters,” the Texas Public Policy Foundation report found.
“They make everything look like Hanky ​​Dory,” said Tanner Arif of Paragon Health Institute. “Only a few researchers, including myself, would like to try it.”
Aliff has been studying nonprofit hospitals for years. He says hospitals’ self-reported numbers can be misleading as hospitals take into account the benefits of their communities. Community profit expenditures do not only help patients with billing. It could also mean funding research, community outreach programs, or educational campaigns that Aliff says are truly just marketing.
A 2020 federal audit highlighted “whether it is unclear what communities the law benefits is unfavourable and should hospitals engage in justifying tax exemptions.” Five years later, Congress has yet to pass a legislation to clarify.
“There’s a huge variety of black boxes around hospitals around charity care and community benefits,” says Aliff. “And that’s where a lot of people here in Texas want to get to the heart because we’re hearing the horror stories of nonprofits not living on their charity missions across the state.”
Texas Rep. Tom Oliverson introduced the bill to his Texas home to prevent hospitals from pursuing debt collection on any of the patients until the hospital confirms that the patients are not eligible for charity care. Currently, nonprofit hospitals need to post charity care by posting signs in the lobby and advertising once a year in the newspaper.
Hernandez’s resolution
For more than a year, Hernandez has been highlighted about her unpaid medical expenses. However, a few days after I-Team contacted Texas Health Harris Methodist Hospital, she received a letter from the hospital saying that she had seen a request for charity care and this time approved it.
“I can actually fall asleep at night, where I wake up at night or at 2am,” Hernandez said. “So, yeah, that’s a big relief.”
In an email, a Texas health spokesman wrote that hospitals are actively evaluating patients for charity care, even if their financial aid applications have not been completed.
