Just exactly how charitable are your local nonprofit charity hospitals?
There is some feeling in the U.S. Senate that it is time to open the curtains on charitable hospitals and require them to prove that they do the charitable work they claim to do in order to get tax breaks.
Recently, a U.S. Senate investigation found charity hospitals that were spending money on research while routinely denying health care to the people who cannot afford it.
The Washington Post said charity hospitals sometimes say they offer low or no cost treatment but fail to tell patients about the option:
“Many of the hospitals that say they offer charity care — meaning free or at reduced prices for low-income people — fail to inform patients about such assistance, Senate Finance Committee staff members found after a 15-month review that included an in-depth survey of 10 nonprofit hospitals.”
“The investigators found that while federal law requires charity care in exchange for tax-exempt status, a 37-year-old IRS rule implementing the law is so vague that nonprofit hospitals have been able to exploit it by offering some free services but often little aid to the poorest people in their communities.”
“Nonprofits frequently charged higher prices to poorer people with no health insurance than they did to better-off patients who had coverage, researchers found. At the same time, many of the hospitals’ top executives enjoyed generous perks such as paid country club memberships and stays at expensive hotels.”
“Grassley for years has raised questions about hospital missions, looking at tax exemptions and floating ideas about mandating levels of charity care.
” ‘For now, there’s no minimum percentage requirement for charity care and community benefit,’ Grassley said in a statement on Baucus’ proposal. But Grassley is not ruling out a required level in the future, saying it needs “more study.’
” ‘I agree with groups that take their charitable mission seriously … that a percentage payout requirement would become a ceiling, not a floor, like the private foundation payout of generally five percent,’ Grassley said in a memo Thursday. ‘Instead, we need a formula that would maximize expenditures for charitable purposes.’ “
Additional resources
- The American Hospital Association (AHA) said filings from a disclosure form called Schedule H could soon offer a clearer picture of how much charity care hospitals provide.
