EXCLUSIVE: Massive Misspending Uncovered In Nonprofit Hospitals Across Texas, New Report Shows
A conservative watchdog group released new research Monday alleging widespread fraud, waste and abuse of funding from three tax-exempt healthcare systems across Texas, the Daily Caller News Foundation first learned.
Libby Bandelin·Oct 26, 2026·5 min read
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A conservative watchdog group released new research Monday alleging widespread fraud, waste and abuse of funding from three tax-exempt healthcare systems across Texas, the Daily Caller News Foundation first learned.
Policy nonprofit Save Our States published its new findings alongside its advertisement on YouTube — both first exclusively shared with the DCNF — highlighting the most egregious findings alleging gross misspending. This comes months after the group published a comprehensive report on extensive spending misconduct in nonprofit hospitals across eight states in June.
“Taxpayers shouldn’t be forced to foot the bill of nonprofit hospitals that act more like big businesses than community charities,” Save Our States Executive Director Trent England said in an exclusive statement to the DCNF. “Giant hospital systems get millions from government programs and tax breaks, then lavishly spend on executive perks, foreign investments, luxurious art collections, and flashy sponsorship deals.”
“Subsidies and tax benefits are supposed to help Texas patients, not bankroll executive perks and other extravagance,” England added. “Lawmakers must take a closer look at these nonprofit hospitals that have strayed far from their charitable mission.”
This is the first time Save Our States has featured Texas’ healthcare systems in an accountability report. The group’s ad spotlights several nonprofit healthcare systems with a history of horrendous squandering.
Memorial Hermann Health System — one of the largest nonprofit hospital networks in Southeast Texas — takes millions from federal programs to pay dozens of executives seven-figure salaries and make billions in foreign investments and sports-team sponsorships, the report’s analysis of the organization’s
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EXCLUSIVE: Massive Misspending Uncovered In Nonprofit Hospitals Across Texas, New Report Shows — IJR
Memorial Hermann operates 17 hospitals, over 280 care sites, and employs more than 35,000 people across the Greater Houston area. Memorial Hermann’s CEO and President David L. Callender received $6,061,094 in its most recent tax year and paid hospital executives Erin Asprec, Alec King, James McCarthy, and Josh Urban between $2 and $3 million annually, Save Our States’ report found. Twenty-one other Memorial Hermann executives received between $1 and $2 million in total compensation, tax forms show.
Memorial Hermann also boasts billions in foreign investments across the globe including $666,000,000 in Central America and the Caribbean; $315,000 in Europe; $42,000,000 in North America (Canada and/or Mexico); $24,000,000 in East Asia and the Pacific, and other areas, the report finds.
The report also draws scrutiny to Memorial Hermann’s partnership with the NBA’s Houston Rockets as the team’s official healthcare provider since 2005.
Memorial Hermann and the Rockets would not say how much the health system would pay the Rockets annually for the sponsorship, citing a confidentiality agreement, but sports marketing and health care experts estimated it to be more than $1 million per year, Save Our States disclosed to the DCNF.
The report also indicated that facilities affiliated with Memorial Hermann appears to have spent hundreds of thousands on inflated art budgets, allocating almost 2 billion dollars collectively to art budgets across three of its centers.
Another healthcare system the report probed into was Mission Regional Medical Center which is currently under investigation for promoting discounted birth packages across the US-Mexico border, subsidized by Americans’ hard-earned tax dollars, the research found
Finally, the research found that Barrio Comprehensive Family Health Care multiplied its revenue more than ten times in the last decade in a partnership with predominantly from a government program that let it buy discounted drugs while charging their patients full price, Save Our States found.
Barrio Comprehensive Family Health Care Center is closely connect and has business ties to CommuniCare Health Centers across Texas, tax-exempt reports find.
CommuniCare’s revenue spiked from $28.8 million in FY2013 to $397.4 million in FY2024. The healthcare organization is a participant in the 340B program and receives over 73 percent of its revenue from the program.
While CommuniCare’s 340B revenue has spiked, as has the provider’s net income — rising fivefold from $4,627,852 in FY 2015 to $23,563,285 in FY 2024.
Compensation for CommuniCare’s CEO Paul Nguyen’s also more than doubled from $330,00 in FY2015 to $740,000 in FY2024.
CommuniCare was found to have “duplicate discounts — inaccurate or incomplete information on the Medicaid exclusion file” and was sanctioned with repayments to manufacturers in an Health Resources and Services Administration (HRSA) audit, Save Our States’ report found.
HRSA Regulators prohibit “duplicate discounts; that is, manufacturers are not required to provide a discounted 340B price and a Medicaid drug rebate for the same drug.”
As state political candidates standoff for the midterms, healthcare affordability and government healthcare fraud remains one of the leading issues for voters, a July KFF poll found.
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