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Non-profit hospital tax breaks attacked by Grassley, again

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Well, folks, if you thought Sen. Chuck Grassley (R-Iowa) was ready to take a breather on the subject of non-profit hospital tax breaks, think again. This week, the Senator used a hearing on incentives for lowering the rates of the uninsured and under-insured in the U.S. to bring the topic up again. At the hearing, which was held by the Senate Finance Committee, Grassley had a 53-year-old leukemia patient testify about her experience with the M.D. Anderson Cancer Center, which demanded a total of $105,000 in cash up front before it would provide chemotherapy.

In discussing the issue, Grassley noted that M.D. Anderson is a non-profit "funded through taxpayers' dollars and charitable gifts," making its actions particularly troubling. As he has many times in the past, Grassley hinted that non-profit tax breaks could be in danger if the hospitals engage in this type of billing practice.

Among other things, Grassley has also proposed that rules be enacted to set minimum levels of charitable spending a not-for-profit would be required to make to keep its tax-free status. Meanwhile, the IRS is taking a closer look at such issues as it rolls out its Form 990, Schedule H, which will require detailed reporting on charitable spending by hospitals.

To learn more about Grassley's discussion at the hearing:
- read this Wall Street Journal blog item

Related Articles:
Senator may seek tougher charity rules for nonprofits
Senator wants nonprofit hospital investigation
IRS to investigate nonprofit hospitals
Charity care under fire

Comments

I hope they finally get this right! Too many non-profit facilities have profit margins much, much too high to be subsidized by tax payers. Provide a minimum level of charity care or be shut!

While I applaude the Senator for taking up the banner for charity care, he appears to be making the assumption that all hospitals are the same.

I work for a hospital system that billed for $3 billion in services last year. How much of that do you think was collected? How about $800 million. The rest was written of as bad debt and some was written off as charity care. Of that $800 million, $60 million was given back to the community in various forms of charity whether it be through free clinics we provide, homeless shelters we support, or other charities. Also of note is the fact that our children's hospital loses money EVERY year due to the fact that we do not turn any child away regardless of their parent's ability to pay.

The problem is that people seem to think that medical care should be provided free of charge to everyone who asks for it. No one stops to think about what happens if medical care is made free of charge or if hospital lose their non-profit status. People will lose their jobs leave hospitals unable to meet the healthcare needs of the community. We currently have 15 hospitals in our system and if we lost our tax breaks the result would be devastating. It would result in nearly $120 in additional property taxes and who knows how much in income taxes. Out of $800 million that won't leave much.

My point is that people seem to think that hospital are these large, wealth corporations that are just rolling in money but that's far from the truth. Some systems like ours are barely able to meet expenditures year to year thanks.

If the Senator really wants to go after companies for their lack of charity, try the oil industry. They seem to have a lot of money right now.

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