If they are (and roughly 85% of US hospitals are) then they probably get tax exemptions. IF they are getting tax exemptions (either Federal or State/Local ones) then they have an obligation to provide charity care to people who are "medically indigent" (meaning poverty level without insurance.)
In the last year, many hospitals have become aware of this requirement because of what has been happening here in Illinois. Here is an article from California discussing the issue of charity care and billing collections practices used by non-profit hospitals.
http://www.californiahealthline.org/index.cfm?action=dspItem&itemid=103986Wall Street Journal Looks at One Not-for-Profit Hospital's Loss of Tax-Exempt Status
June 29, 2004
The Wall Street Journal on Tuesday examined Provena Covenant Medical Center's "fight to regain its local property-tax exemption amid questions about financial treatment of the uninsured, including aggressive debt-collection tactics." In February, the Illinois Department of Revenue revoked the property tax-exempt status of the not-for-profit hospital in Urbana, Ill., because local authorities determined it was not a charitable institution. The decision was made after the Champaign County Board of Review, a panel that oversees property-tax assessments, documented that the hospital had filed lawsuits and used other debt-collection tactics to pressure patients to pay their medical bills. Since February, Provena has begun to pay local property taxes, including $1.1 million for 2002 and $700,000 toward a total of $1.4 million for 2003. Provena's 2004 assessment is expected soon.
Changes
Provena has launched a series of changes to regain its reputation and demonstrate to officials that it is entitled to tax-exempt status, including increasing no-cost and discounted services by 40% since 2003, avoiding undertaking lawsuits and other bill-collection techniques and using newspaper ads and signs in the hospital to inform patients about available financial help. However, "those steps ... may not be enough to satisfy demands of authorities," the Journal reports. According to the Journal, Stan Jenkins, a member of the Champaign County Board of Review, said that despite the amount the hospital spends on charity care, it still will not meet Illinois Property Tax Code terms, which say that a not-for-profit entity must be used "exclusively" for charitable purposes. I was one of those board members and so far our ruling still stands.
Check YOUR local laws and get loud about what you expect from your local hospitals. The only way we are going to see change is if we (the consumers) force it.
Laura