Are hospitals fudging charity care numbers?

Many hospitals may not need the fiscal benefits of providing and reporting charity care, according to 100Reporters.

U.S. hospitals claim to provide $13 billion in charitable care benefits but provide little tangible or transparent data of what constitutes those benefits to the public, according to the non-profit group of journalists.

"Many large not-for-profit hospitals are throwing grand parties, collecting pricey art, paying their executives private-sector wages, making loans to high-ranking employees, sponsoring football teams, extending their global reach and stashing cash overseas," the article said, suggesting that such practices contributed to higher healthcare costs.

At Cedars-Sinai Medical Center in Los Angeles, the 11 highest-paid executives received more than $21.4 million in 2012, while a recent charity benefit raised less than a quarter of the salary paid to its chief executive officer, despite raffling off a six-figure luxury hybrid vehicle, according to the article.

Furthermore, the Internal Revenue Service does not provide enough oversight of how hospitals reported their charity care numbers, the piece stated.

"Let's say a little girl has leukemia and the family is destitute," one doctor told 100Reporters. "The hospital says it's going to treat her at no charge. So the care costs, let's say, $100,000. But then the administrator, seeing an opportunity, inflates the bill to $300k (what he would have received from his best private insurance payer) and claims $300k as charity care. Is that correct, or should it be based on the actual cost, $100k? This is the game."

Hospitals have come under wide criticism as to how they dole out charity care, ranging from potential abuses in the 340B drug program to a relative dearth of such care being provided by Catholic facilities.

The IRS has attempted to tighten up some of the reporting requirements of hospitals, but its regulations have mostly made marginal improvements, rather than mandating what kind of charity care hospitals must provide. 

To learn more:
- read the 100Reporters article

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