Thursday, May 28, 2015

Californians Argue Over the Meaning of "Community Benefit"

According to this Fresno Bee article, The California Nurses Association (CNA) is up in arms regarding the extent to which California nonprofit hospitals generate community benefit.  CNA argues that federal law (see IRC 501(r)) does not sufficiently hold nonprofit hospitals' feet to the fire when it comes to proving their entitlement to tax exemption.  The article provides a link to a recently defeated bill (SB346) in the California legislature that would have strictly defined "community benefit."  The bill will be reintroduced, apparently, in the next legislative session.  Here is a summary of what the bill would require:

Existing law makes certain findings and declarations regarding the social obligation of private nonprofit hospitals to provide community benefits in the public interest, and requires these hospitals, among other responsibilities, to adopt and update a community benefits plan for providing community benefits either alone, in conjunction with other health care providers, or through other organizational arrangements. Existing law requires each private nonprofit hospital, as defined, to complete a community needs assessment, as defined, and to thereafter update the community needs assessment at least once every 3 years. Existing law also requires the hospital to file a report on its community benefits plan and the activities undertaken to address community needs with the Office of Statewide Health Planning and Development. Existing law requires the statewide office to make the plans available to the public. Existing law requires that each hospital include in its community benefits plan measurable objectives and specific benefits.
This bill would declare the necessity of establishing uniform standards for reporting the amount of charity care and community benefits a facility provides to ensure that private nonprofit hospitals and nonprofit multispecialty clinics actually meet the social obligations for which they receive favorable tax treatment, among other findings and declarations.
This bill would require a private nonprofit hospital and nonprofit multispecialty clinic, as defined, to provide community benefits to the public by allocating a specified percentage of the economic value of community benefits to charity health care, as defined, and community building activities, as specified. The bill would, by January 1, 2018, require a private nonprofit hospital or nonprofit multispecialty clinic to develop, in collaboration with the community benefits planning committee, as established, a community health needs assessment that evaluates the health needs and resources of the community. The bill would also require these entities, prior to completing the needs assessment, to develop a community benefits statement and a description of the process for approval of the community benefits plan by the hospital’s or clinic’s governing board, as specified. The bill would authorize the hospital or clinic to create a community benefits advisory committee for the purpose of soliciting community input. This bill would require the hospital or clinic to make available to the public a copy of the assessment, file the assessment with the Office of Statewide Health Planning and Development, and update the assessment at least every 3 years.
This bill would also require a private nonprofit hospital and nonprofit multispecialty clinic, by April 1, 2018, to develop a community benefits plan that includes a summary of the needs assessment and a statement of the community health care needs that will be addressed by the plan, and list the services, as provided, that the hospital or clinic intends to provide in the following year to address community health needs identified in the community health needs assessments. The bill would require the hospital or clinic to make its community health needs assessment and community benefits plan or community health plan available to the public on its Internet Web site and would require that a copy of the assessment and plan be given free of charge to any person upon request.
This bill would require a private nonprofit hospital or nonprofit multispecialty clinic, after April 1, 2018, every 2 years to annually submit a community benefits plan to the Office of Statewide Health Planning and Development, as specified, and would allow a hospital or clinic under the common control of a single corporation or other entity to file a consolidated plan, as provided. The bill would require that the governing board of each hospital or clinic adopt the community benefits plan and make it available to the public, as specified.
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