Tuesday, June 2, 2009

Pressure to Require Hospital Charity Care Continues

Even with the prospect of major health care reform looming, debate continues in both Congress and at the state and local level about requiring nonprofit hospitals to provide a minimum level of charity or give up some of the tax benefits they enjoy.  At the federal level, the New York Times reports that the American Hospital Associationhas begun a major lobbying campaign to derail a bipartisan proposal for such a requirement that is currently in the Senate Finance Committee.  According the AHA health reform website, its effort is driven by the belief that "[t]he 'community benefit' standard for tax exemption should be retained because it allows hospitals to meet the diverse needs of the different communities they serve.  Formula-driven approaches prevent flexibility and innovation in responding to the unique needs of different populations." 

The Boston Globe published a lengthy report that concludes nonprofit hospitals are receiving more from tax breaks than they are providing in charity care.  It found that the ten leading Massachusetts hospital companies received an estimated more than $600 billion in tax benefits in 2007, as compared to free charity care provided that totaled substantial less than this amount.  The report acknowledges, however, that some of the hospitals themselves provide a much lower estimate of the tax benefits they enjoy and that the charity care figure does not include other community benefits, such as medical education and research and community outreach programs.  The article describes both the Senate Finance Committee deliberations and proposals by various state and local officials to require nonprofits, including hospitals, to pay more to support local government, whether in the form of payments in lieu of taxes (PILOTs) or through a partial repeal of their property tax exemption.

LHM

http://lawprofessors.typepad.com/nonprofit/2009/06/federal-and-state-drives-to-require-hospital-charity-care-continue.html

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