March 1, 2013
Nonprofit Hospitals: "Community Benefit" Not Excessive Compensation is the Problem
In a provocative post on Economix today, Uwe Reinhardt casts nonprofit hospitals in the role of the true villians behind soaring healthcare costs and vicious billing practices riping apart the middle class:
Americans are shocked, just shocked. But what they should have known for years is that in most states, hospitals are free to squeeze uninsured middle- and upper-middle-class patients for every penny of savings or assets they and their families may have. That’s despite the fact that the economic turf of these hospitals – for the most part so-called nonprofit hospitals – is often protected by state Certificate of Need laws that bestow on them monopolistic power by keeping new potential competitors at bay . . . As George Bernard Shaw, whose works include “The Doctor’s Dilemma,” might have put it, that any lawmaker would grant hospitals monopolistic powers plus the freedom to price as they see fit is enough to make one despair of political humanity. . . . All manner of amazing behavior can hide under the pious label of “nonprofit.” A giant, inscrutable economic sector, in command of trillions of dollars in resources, nonprofits are governed by nonelected, self-perpetuating boards and virtually no effective accountability to any “owners” or the general public. By comparison, for-profit institutions are paragons of good corporate governance, transparency and accountability; I shall comment more on that in a future post.
The posts goes on, painfully describing how the focus on "community benefit" and the sensationalism of hospital executive compensation has done nothing but obscure the real problem and thus the real solution.
It should be possible to compensate hospital executives well without treating middle-class uninsured people like lemons to be squeezed fiscally. After all, as Mr. Brill shows, these so-called nonprofit hospitals typically have ample profits that would permit humane comportment in billing the uninsured while paying executives enough to retain them.
Read the post for Reinhardt's solution to the mess he lays at the feet of nonprofit hospitals. All I can say is that economist may be no better at predicting economic outcomes than siesmologists are at predicting earthquakes, but the best of them sure are good at calling the rest of us stupid.
February 28, 2013
IRS Expands Voluntary Worker Classification Settlement Program
Here's something else about the IRS...Earlier this week, the Internal Revenue Service announced that it has expanded its Voluntary Classification Settlement Program (VCSP), paving the way for more taxpayers to take advantage of this low-cost option for achieving certainty under the law by reclassifying their workers as employees for future tax periods.
According to the IRS, the agency is modifying several eligibility requirements, thus making it possible for many more interested employers, especially larger ones, to apply for this program. Thus far, nearly 1,000 employers have applied for the VCSP, which provides partial relief from federal payroll taxes for eligible employers who are treating their workers or a class or group of workers as independent contractors or other nonemployees and now want to treat them as employees. Businesses, tax-exempt organizations and government entities may qualify.
Under the revamped program, employers under IRS audit, other than an employment tax audit, can qualify for the VCSP. Furthermore, employers accepted into the program will no longer be subject to a special six-year statute of limitations rather than the usual three years that normally applies to payroll taxes.
IRS to Post Updated List of Organizations That Lost Tax-Exempt Status
Today's Chronicle of Philanthropy is reporting that beginning in March, the Internal Revenue Service plans to start posting a more up-to-date list of organizations that have had their tax-exempt status automatically revoked for not filing proper paperwork.
In the past, the IRS has waited for six months after taking action to release the names of nonprofits that no longer hold charity status because they failed to file legally required documents for three consecutive years. Going forward, however, the tax agency will release names a month after a group has lost its exemption.
In announcing the change, the IRS said: “Because of this change, the number of organizations added to the list in March 2013 will appear higher than in other months because it includes a catch-up period of about seven months.”
The Chronicle reports tax experts as saying that the change is good for potential donors who need to know if a group remains tax-exempt. Donors cannot claim a charitable deduction for any gifts made to an organization after the date the IRS announces the revocation of its tax-exempt status.
Target to Offer Education Grants
National retailer, Target, has announced a charitable initiative designed to bring arts and cultural experiences directly to K-12 children. The company will be awarding grants of $2,000 for programs that enhance the classroom curricula by bringing the arts and cultural experiences to schools via in-school performances, artist-in-residency programs and workshops, among others. Programs must take place between September 2013 and August 2014.
Grants will be restricted to K-12 educational institutions and organizations with tax-exempt status under Section 501(c)(3) of the Internal Revenue Code.
Applications are accepted between March 1 and April 30 each year, with grant awards announced in September.
February 26, 2013
$15 Million in Grants Aimed at Improving School Performance
Americorps has announced the availability of $15 million in grants for the nation’s most underperforming schools, this through a new program called Turnaround AmeriCorps.
According to Samantha Jo Warfield, acting press secretary of the Corporation for National and Community Service (CNCS), the $15 million -- from both CNCS and the U.S. Department of Education -- will fund nonprofits, civic organizations and local government entities working directly in the schools and utilizing AmeriCorps members. Grant applications are due on April 23; funding announcements are expected in July.
The NonProfitTimes reports Warfield as saying: “What’s really great about this program is AmeriCorps members will be providing direct services within schools. It’s an innovative way of tackling some of the pressing challenges facing our communities.”
The Times continues:
Warfield said the number and dollar amount of the grants depend on the number of applicants. There are no target start dates for programs yet. Likely programs include helping students with reading and math, helping them navigate college entry and financial aid applications, raising the graduation rate of the schools and working to improve non-academic success factors such as discipline, attendance rates and school safety.
“The list (of projects) runs the gamut of services and a lot of that will speak to the organizations that seek to apply,” said Warfield.
School Turnaround AmeriCorps will be a new program to which AmeriCorps members can apply, much like FEMA Corps, formed last year. Warfield said her CNCS’s focus at the moment is on ensuring a robust pool of AmeriCorps applicants. “A successful AmeriCorps member is going to be someone really passionate about education at any end of the spectrum, whether ensuring our youngest students are prepared with solid reading skills or helping to build pathways to college for first generation college goers,” said Warfield. “Because it’s a broader scope, there’s going to be something for everyone.”
The program is set up for 650 AmeriCorps members per year for three years. The project’s goal will depend upon the grant applications, but will fit “in line with some of the larger education goals,” said Warfield. “It will seek to increase educational achievement and high school graduation rates and increase college readiness,” she said. “We’ll be looking at all of those factors. Impact and success is demonstrated through grantee-specific performance outcomes.”