community benefit

Study: Non-profit community benefit programs growing

Anne Zieger — Fri, 25 Jul 2008 10:32:03 -0400

Despite some major challenges, community benefit programs at not-for-profit health systems are growing, according to a recent survey by the Catholic Health Association and VHA. The survey, which polled more than 200 attendees of a joint CHA/VHA conference on the subject, found that three-quarters of respondents had expanded community benefit programs during the past three years--and that they expect to keep expanding such programs for at least three more years. Just fewer than 10 percent said that subsidized medical care and outreach levels fell during the past three years--but none of the respondents expected such programs to shrink in the near future.

When asked which programs delivered the most impact, improving access to care ranked first with respondents, followed by health education, and promotion and management of chronic conditions. Medical and health professional education, meanwhile, was ranked as least beneficial.

However, there are challenges involved in continuing to grow community benefit programs, of course. When polled on their biggest concerns, the number one challenge named by respondents was limited staffing to implement such programs, following by confusion over how community benefits fit into a health system's larger priorities. Financial constraints ranked third.

To learn more about the survey:
- read this Modern Healthcare article (reg. req.)
- read this CHA press release

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Ohio AG working to define charity care

Fri, 01 Feb 2008 06:59:57 -0500

Ohio Attorney General Marc Dann has kicked off an initiative under which he plans to better define what the state's not-for-profit hospitals must do to keep their state property tax exemption. Among other things, Dann wants to see poor and uninsured patients pay no more than insurance companies pay for care. As part of the initiative, Dann plans to hire experts to study charity care issues and look at what other states are doing. He's interested, for example, in a Minnesota accord under which hospitals agreed not to use abusive debt collection practices or charge uninsured patients more than insurance companies. He also plans to examine the efforts made by Sen. Chuck Grassley (R-Iowa), who, as FierceHealthcare readers know, has been all over the issue of hospitals' charity care levels for years. His initiative comes as several Ohio communities have begun questioning the tax-exempt status of their local not-for-profit hospitals. For example, one community is challenging the tax exemption enjoyed by a Beachwood, OH facility run by the Cleveland Clinic, arguing that it provides no charity care or other community benefits.

To find out more about Ohio's initiative:
- read this piece in The Plain Dealer

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San Fran hospitals didn't use $79M for charity

Tue, 29 Jan 2008 06:59:56 -0500

Despite getting $79 million in tax breaks intended to help fund uncompensated care for the poor and uninsured, San Francisco's five not-for-profit hospitals only provided $16 million in charity care, according to a report by the city's Department of Public Health. It also noted that while the city's public hospital treated 81,000 charity patients last year, at a cost of more than $100 million a year, the five not-for-profit hospitals combined treated only 16,000 charity patients, city officials said.

The report contends that the bulk of the disparity was created by California Pacific Medical Center, which got close to $70 million in tax breaks while spending only $5.2 million in charity care. Chinese Hospital, another not-for-profit, got $3.8 million more in tax breaks than it spent on charity care, regulators said. Meanwhile, St. Luke's Hospital, St. Mary's Hospital and St. Francis Medical Center got less in tax breaks than they spent on charity care, the city said.

However, California Pacific argued that the city's definition of charity care is unduly strict, and doesn't include programs like it's new low-cost health center and breast cancer prevention program for African American women, nor does it take into account the losses it suffers when treating Medi-Cal patients at public hospital rates. When those factors are taken into account, California Pacific still fell $4.6 million short compared to its tax benefits, a spokesman contends.

To learn more about the report (and its repercussions):
- read this San Francisco Chronicle piece

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Mass. AG investigates non-profits' help to communities

Thu, 17 Jan 2008 06:59:55 -0500

Massachusetts Attorney General Martha Coakley has pulled together a task force to investigate whether not-for-profit hospitals and HMOs are meeting their obligations under the state's Community Benefits Program. Under the program, which was instituted in 1994, HMOs and hospitals don't have to meet standardized guidelines, but they do require the hospitals to formalize their approach to community benefits planning and delivery. Hospitals and HMOs must also file reports detailing how they met these requirements.

The new task force will look at whether the Program should develop new strategies for addressing the state's emerging public health needs, and also whether it should streamline annual reporting requirements. Despite the forming of the task force, there's no sign that Coakley feels the not-for-profits aren't meeting their burden, but I'm sure some of the state's not-for-profits will still be sweating a bit until the task force concludes.

To find out more about the program:
- read this Boston Business Journal piece
- review this overview of the Community Benefits Program

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IRS rolls out not-for-profit reporting rules

Tue, 08 Jan 2008 06:59:58 -0500

Like it or not, it seems that new IRS rules on not-for-profit reporting are about to arrive. The rules, which will go into effect this year and next, will force not-for-profit hospitals to provide a great deal more information on their governance structure, executive pay and perks and perhaps most controversially, how much subsidized and free care they provide. The reporting will be detailed in a supplement (Schedule H) to the IRS's Form 990, which is used both in and outside healthcare by not-for-profits to report revenue and expenses. The idea is to make sure that hospitals report their financial policies and condition, and justify their tax-exemption, on a uniform basis.

While many industry organizations are comfortable with the new requirements, some are upset that bad debt and Medicare losses, while listed, are not counted as community benefits. Not only that, hospitals aren't pleased that if they want to claim bad debt or Medicare losses, they must disclose the method they used to come up with this estimate.

Perhaps the hottest potato of all is community benefit reporting. The new form breaks down such reporting into eight expenses, including charity care, cash and in-kind contributions to community groups, community health improvement, professional education, research, subsidized health services, un-reimbursed Medicaid and other public, means-tested programs and a catch-all "other benefits" category. Some industry players complain that comparing community benefit from one organization to another could be problematic, given how differently they may be structured. Maybe future IRS form adjustments will address this--but it looks they'll have to live with things as is for the time being. Time for some creative accounting, folks?

To learn more about the rules:
- read this Modern Healthcare article (reg. req.)

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AHA makes headway on community-benefit reporting

Mon, 12 Nov 2007 06:59:58 -0500

The American Hospital Association has won broad support from the U.S. House of Representatives in its attempt to change the IRS's proposed community-benefit reporting rules. More than 300 members of the House are backing the AHA's campaign to change the IRS's proposed requirements, which would come as part of changes to the agency's Form 990 annual filing form for not-for-profits.

While the IRS's current draft of Form 990 doesn't do so, the AHA would like to see the IRS include bad debt and Medicare losses as part of community-benefit reporting. In a letter to the IRS urging the changes, lawmakers are also asking the IRS to put off adopting the community-benefit reporting policy until 2010. Otherwise, it should go into effect as soon as early 2008.

The AHA may have some support for this effort, but it's worth noting that such protests have at least one major detractor as well. Senate Finance Committee Chairman Chuck Grassley (R-IA) has strongly challenged the hospital industry's efforts to frame charity reporting differently. Grassley has repeatedly called for investigations into whether not-for-profits are doing enough to merit their federal tax exemption.

To learn more about the debate:
- read this Modern Healthcare article (reg. req.)

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Senator may seek tougher charity rules for nonprofits

Fri, 02 Nov 2007 07:59:55 -0400

Fairly or not, Sen. Chuck Grassley (R-Iowa) seems to be exasperated with nonprofit hospitals--and that could mean trouble. Yesterday, during a roundtable discussion on nonprofits and charity care, Grassley said that he isn't satisfied with the extent to which nonprofits share information on the community benefits they provide. In fact, his staff has apparently already prepared draft proposals which would impose tougher charity demands--including a possible rule requiring that they dedicate 5 percent of annual patient operating expenses or revenues to charity care--but Grassley says he hasn't decided whether he'll go ahead and file legislation to this effect.

Grassley is piqued that some hospitals are opposing changes to the IRS Schedule H and Form 990 which would require nonprofits to provide more detail on their charity care activities and overall community benefit. Some nonprofits have challenged the IRS's plans, saying that the proposed changes would pose a heavy reporting burden and would impose too restrictive a definition of community service, limiting their ability to respond creatively to community needs.

To find out more about Grassley's plans:
- read this Contra Costa Times piece

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PA hospitals peg community benefit at $3.9B

Thu, 25 Oct 2007 06:59:57 -0400

A trade group representing Pennsylvania hospitals has issued a study quantifying the community benefit its members deliver, as well as the economic impact they have on the state. The report, published by the Hospital & Healthsystem Association of Pennsylvania, concluded that its members deliver $3.9 billion in community benefits per year, which includes unreimbursed costs for treating indigent patients and community services like free clinics, health screenings and outreach. It also concluded that the hospitals contribute nearly $77 billion to the state's economy, including $32.3 billion in direct spending and $44.5 billion in secondary spending. Also, the hospitals employ 563,000 through direct and secondary channels, the group said.

As I see it, HAP is very wise to toot its members' horn this way. Given the growing pressure on hospitals to justify tax exemptions, anything that highlights their contributions is politically smart, and what's more, forces hospitals to think about such reporting more carefully. Frankly, I'm surprised I don't hear more about such initiatives in other states.

To learn more about the report:
- read this Philadelphia Business Journal piece

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Groups push for federal community benefit standards

Fri, 28 Sep 2007 06:59:58 -0400

A coalition of community groups is recommending that the federal government set some strict, easily measurable community benefit standards for non-profit hospitals. The groups, led by Boston-based Community Catalyst, are recommending that to keep their tax exemption, non-profit hospitals be required to provide free care valued at five percent of revenue or operating expenses (whichever is greater).

The groups would also like to see universal guidelines put into place for which patients qualify for free care. They're suggesting that all patients earning up to 200 percent of the federal poverty level get free care and those with incomes at 200 percent to 400 percent of the federal poverty level get partial free care.

To hear more of the discussion:
- read this Modern Healthcare article

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IRS says 'uncompensated care' definition is dicey

Fri, 20 Jul 2007 06:59:58 -0400

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.)

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