Dive Brief:
- Last week, members of the California Nurses Association marched at the state capitol to demand a bill to toughen reporting requirements by nonprofit hospitals on what they are providing in exchange for their tax-exempt status.
- The California bill, which was initially struck down but is now up for reconsideration, would tighten the state's definition of what qualifies as a community benefit.
- Such legislation would impact the two-thirds (or 207) of California's 347 hospitals that were nonprofit in 2013.
Dive Insight:
In order to be granted nonprofit status, hospitals must provide free care to those who cannot afford services and also provide community outreach programs to underserved populations. Each year, the hospitals must fill out a tax form outlining their charitable activities. In CA, they must also regularly submit plans to the state describing the community benefits they intend to provide.
If the law passes, other states may follow suit. In the meantime, nonprofit hospitals might want to review their current charitable activities and make sure they're currently in line with state and federal regulations and that their documentation is up-to-date, as the operations of nonprofit healthcare organizations continue to come under fire.
Want to read more? You may enjoy this story about whether Blue Shield of California eventually convert to for-profit.