Jul

29

How much charity care must hospitals give to remain tax-exempt?

By Case Management Weekly

If Sen. Charles Grassley has his way, nonprofit hospitals will have to prove they spend at least 5% of expenses on charity care if they are to keep their tax-exempt status. But a review of what's happened in Maryland suggests such a rule would be unrealistic and largely inappropriate.

That's the conclusion of a report, published recently in the online edition of the journal Health Affairs, which found extremely wide variation in levels of all types of community benefit each hospital reported.

For example, charity care, a subset of community benefit defined generally as that care given to patients without any expectation of payment, varied from 0.05% to 6.33%. Only two hospitals reported contributing 5% or more.

But total community benefit, which included other categories of uncompensated care, such as health professionals' education, community health services, and "mission-driven" programs and research, varied from 1.17% to 14%.

Source: HealthLeaders Media