Senate Investigation Looks at How Much Charity Care Nonprofit Hospitals Provide

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.”

The Chicago Tribune reported on a bill proposing to improve nonprofit hospitals’ service to the community:

“A national health bill released last week by Democratic Senate Finance Committee Chairman Max Baucus includes a proposal from the ranking Republican on the panel, Sen. Chuck Grassley of Iowa, to ‘improve the community service, transparency and billing practices of nonprofit hospitals.’ The legislation also would require hospitals to adopt and ‘widely publicize’ written financial assistance policies, which are now largely voluntary.’

“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.’ “

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