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Feds to crank up non-profit charity demands

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Watch out, charity hospitals--Sen. Chuck Grassley is coming after you. In recent times, the Iowa Senator has been on the warpath over what he considers to be inadequate levels of charity care provided by hospitals--and has even had staff draft a proposal which would require hospitals to dedicate 5 percent of annual patient operating expenses or revenues to charity care. Meanwhile, the IRS is making changes to not-for-profit reporting forms which would ask hospitals to do more detailed reporting on the community benefits and charity care they provide. States, while less aggressive, are certainly keeping their eye on the issue. And don't forget advocacy groups--they're on the case, too.

Sure, this isn't a new thing. In fact, the IRS and legislators have been posturing on this subject for years. But my sense is that non-profit charity standards will be under particularly intense scrutiny this year. Look for other parties to insert themselves into the charity care/benefit debate in '08, including more state regulators. And if you're a not-for-profit hospital, make it a priority to document what you do in more detail than you ever have. Glossy brochures, happy talk and PowerPoints alone aren't gonna cut it.

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The only reason the IRS & Congress are finally considering this issue is because Dickie Scruggs in Mississippi started hauling not for profit hospitals that did NOT live up to their non-profit status by providing indigent care, into court with lawsuits. Too bad it took a class action plaintiff attorney to make the system work ...

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