Study: Charity care threshold may be tricky proposition

As far as Stormin' Sen. Chuck Grassley (R-IA) is concerned, it's perfectly reasonable to impose a minimum threshold non-profit hospitals must meet in order to qualify for their tax exemptions. Other members of Congress seem to share his convictions, or at least the feeling that something ought to be done to quantify how much charitable service non-profits offer.

Non-profits have been extremely concerned about this, arguing that every hospital's circumstances are different, and that applying a single standard--such as a percentage of revenues spent on charity care--wouldn't be fair. Fortunately for the hospital industry, a study appearing in a leading trade journal appears to bear out their conclusions.

The study, which appears in Health Affairs, looks at the experience of Maryland's hospitals when the state instituted a community benefit reporting program. As it turned out, community benefit spending by the hospitals did in fact increase over the first four years of the program, but in 2007, virtually none of the hospitals would have met the 5 percent of revenue standard proposed by the Senate Finance Committee's minority staff.

To learn more about this story:
- read this HFMA News piece

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