Tuesday, March 16, 2010

The AHA is at it AGAIN

The American Hospital Association doesn't like the new Schedule H to form 990, because it . . . well, because it does pretty much exactly what the IRS intended.  According the AHA, the Schedule H is fatally flawed because it bases its reporting on EIN's rather than on a system-wide basis.  As a result, individual hospitals with individual EIN's report . . . wait for it . . . INDIVIDUALLY!  Which according to the AHA means that certain system-wide expenses are "missed" by the 990.  In addition, the AHA complains, as usual, that bad debts (e.g., when a hospital bills a poor patient, hounds them with debt collection proceedings and then discovers that, praise be, they really ARE poor!) and Medicare shortfalls (e.g., the difference between what a hospital claims it costs for care vs. government reimbursement - never mind that Medicare reimbursement rates are designed to make care more efficient and squeeze out waste) aren't included in community benefit, nor are "community-building" expenses such as physical improvements in the neighborhood, economic development and workforce development.  Which begs the question why hospitals aren't spending their economic development money on, say, care for the poor.

All this was hashed out ad nauseum when the IRS was putting the new Schedule H together.  In effect, the AHA is trying to re-litigate decisions the IRS made after reading a zillion statements from AHA members about how these exact things would adversely affect their community benefit expenses.  It's no surprise that the AHA wants to include everything a hospital spends in community benefit reporting.  "Hey, we keep the toilets clean, so let us report that as a community benefit expense."  Sure.

There is really only one problem with Schedule H, which is that hospitals file it at all - this could easily be remedied by recognizing that the modern hospital is just a big business that doesn't deserve tax exemption and revoking tax-exempt status completely.   But something tells me the AHA isn't going to be making THAT argument any time soon.

JDC 

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