Dive Brief:
- Politicians are increasingly questioning how much nonprofit hospitals actually give back to their communities, with some showing an interest in challenging their tax exemptions.
- While it's been difficult, in the past, to determine just how much nonprofit hospitals give to their communities, provisions in the PPACA and new IRS reporting requirements are helping to make it clearer how much hospitals provided in the way of community benefit.
- Research has concluded that there is little consistency in terms of how much nonprofits give in terms of community benefit and charity care; One New England Journal of Medicine study issued this year found that some hospitals spent less than 1% and others about 20% of their operating costs on charity caring community benefit.
Dive Insight:
To date, it's been very rare for hospitals to lose their tax exemption, even in cases where hospitals had great difficulty proving that they were making a major contribution to the community. But with government, the media and healthcare experts watching more closely than in the past, it seems likely that more nonprofit hospitals will face challenges to their status. With hospitals now subject to review every three years under the ACA, they'll need to take pains to prove that they deserve their tax exemption.