Saturday, February 21, 2009

AHA Defends Nonprofit Hospitals from IRS Report

The AHA has responded to the IRS Hospital Report with a press release that of course defends nonprofit hospitals from any unsavory light cast by the report. The press release complains that

For example, 80 percent of the hospitals surveyed did not report Medicaid underpayments. And, hospitals weren't even asked for the amount they spend to keep costly and critical community services, such as trauma, long-term and neonatal care available to their communities.

Yeah, right. Of course the AHA did not highlight the ridiculous practice of hospitals reporting the amount of uncompensated care and other community benefits by the difference between standard charges and costs (a practice I complained about a few days ago); nor did they mention that some hospitals not only reported Medicaid shortfalls but also Medicare shortfalls (the latter is not counted as community benefit in the new IRS Schedule H to Form 990, nor is it counted by the Catholic Health Association's community benefit guidelines); nor did they notice that the vast majority of community benefit (about 78%) was produced by one-fifth of the surveyed hospitals (see this blog post at the Wall Street Journal for more). What the AHA needs to do is get their collective heads out of the dark, constricted passage they are in and face the facts: some nonprofit hospitals deserve tax exemption (and by the way, those are not necessarily the ones reporting the most community benefit); others operate no differently from any for-profit business and ought to be paying taxes just like everyone else.

I'll have more thoughts on the IRS Hospital Report later this weekend, so stay tuned.

JDC

http://lawprofessors.typepad.com/nonprofit/2009/02/aha-defends-non.html

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