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IRS says 'uncompensated care' definition is dicey
Sure, U.S. non-profits say they deliver uncompensated care--and there's no doubt poor and uncompensated patients are getting some form of service. The problem, however, is there's no universally accepted definition for uncompensated care and community benefit reporting, according to a new IRS report.
Trade groups like the Healthcare Financial Management Association have a role, but none have established an all-hands-on-deck standard. So the IRS may issue a new Form 990 (the form used to report a non-profit's financial condition) to address this lack of standards. This could hit the hospital industry like a bomb, as it's inevitable a tighter IRS-defined standard would work against some hospitals by forcing them to reduce their community benefit estimates.
The IRS's plans follow a May 2006 survey, in which the agency checked in with about 500 tax-exempt hospitals to learn how they provide and report community benefits. Ninety-seven percent of hospitals responding to the survey said that they have a written uncompensated-care policy. But the responses trouble the agency, which fretted over a "lack of consistency or uniformity in classifying and reporting uncompensated care."
To learn more about about the IRS's plans:
- read this Modern Healthcare article (reg. req.)
Related Articles:
IRS to investigate nonprofit hospitals. Report
Proving community benefit by reducing sickness. Report
A critical time to prove community benefit. Report
A new standard for voluntary hospitals? Report
VHA: Charity policy must come from the top. Report
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