scholarly journals Charity Care and Community Benefit in Non-Profit Hospitals: Definition and Requirements

2021 ◽  
Vol 58 ◽  
pp. 004695802110281
Author(s):  
Hossein Zare ◽  
Matthew Eisenberg ◽  
Gerard Anderson
Keyword(s):  
Descriptive Analysis ◽  
Charity Care ◽  
Community Benefit ◽  
Policy Makers ◽  
American Hospital ◽  
American Hospital Association ◽  
Non Profit ◽  
Gini Coefficients ◽  
Community Benefits ◽  
Total Community

Policymakers are using different ways to measure the community benefit provided by non-profit hospitals because different policy makers have different policy objectives. We compare 3 commonly used measures of community benefit; examine the correlation across the 3 measures; examine how the distribution of community benefits varies across non-profit hospitals; and compare the factors associated with the level of community benefit for each definition. The main dataset for this study is the Schedule H of IRS Form 990 data for 2017. We merged this data with the 2017 American Hospital Association (AHA), the 2017 CMS Hospital Cost Report, and the 2018 American Community Survey data. The final sample consists of 1904 non-profit hospitals. We define 3 measures of community benefit: (1) Total community benefits: combining all 17 possible measures in the 990 data; (2) Total community benefits less unreimbursed Medicaid care because it reflects a policy choice made by the state; and (3) only charity care. We also subdivided the community benefits into individual and service-based benefit. Gini Coefficients and descriptive analysis show the distribution of 3 types of community benefit measures. On average, hospitals spent 8.1% of their expenses on all community benefits; 4.3% on community benefits less unreimbursed Medicaid; and 1.7% on charity care. The provision of charity care showed more variation (Gini coefficient) than the other 2 measures. Different hospital and geographic characteristics were associated with each definition, suggesting that different types of hospitals place emphasis on different community benefits. When policy makers choose among different definitions of community benefit, they should consider what incentives they want to instill.

scholarly journals Comparing the Value of Nonprofit Hospitals’ Tax Exemption to Their Community Benefits

2018 ◽  
Vol 55 ◽  
pp. 004695801775197 ◽  
Author(s):  
Bradley Herring ◽  
Darrell Gaskin ◽  
Hossein Zare ◽  
Gerard Anderson
Keyword(s):  
Hospital Cost ◽  
Internal Revenue Service ◽  
Nonprofit Hospitals ◽  
Community Benefit ◽  
American Hospital ◽  
Internal Revenue ◽  
Community Benefits ◽  
Annual Survey ◽  
Tax Exempt ◽  
Total Community

The tax-exempt status of nonprofit hospitals has received increased attention from policymakers interested in examining the value they provide instead of paying taxes. We use 2012 data from the Internal Revenue Service (IRS) Form 990, Centers for Medicare and Medicaid Services (CMS) Hospital Cost Reports, and American Hospital Association’s (AHA) Annual Survey to compare the value of community benefits with the tax exemption. We contrast nonprofit’s total community benefits to what for-profits provide and distinguish between charity and other community benefits. We find that the value of the tax exemption averages 5.9% of total expenses, while total community benefits average 7.6% of expenses, incremental nonprofit community benefits beyond those provided by for-profits average 5.7% of expenses, and incremental charity alone average 1.7% of expenses. The incremental community benefit exceeds the tax exemption for only 62% of nonprofits. Policymakers should be aware that the tax exemption is a rather blunt instrument, with many nonprofits benefiting greatly from it while providing relatively few community benefits.

Charitable Hospital Accountability: A Review and Analysis of Legal and Policy Initiatives

1998 ◽  
Vol 26 (2) ◽  
pp. 116-137 ◽  
Author(s):  
Alice A. Noble ◽  
Andrew L. Hyams ◽  
Nancy M. Kane
Keyword(s):  
Local Authorities ◽  
Nonprofit Hospitals ◽  
Community Benefit ◽  
State Legislation ◽  
American Hospital ◽  
Early American ◽  
Community Benefits ◽  
Tax Exempt ◽  
Nonprofit Hospital ◽  
State And Local

Hospitals long ago shed their role as alms houses for the poor. What vestiges remain of the early American hospital are the tax-exempt, nonprofit hospital form and a general perception that hospitals, as charitable institutions, owe a duty to their communities. The appropriateness of the nonprofit hospital tax exemption has long been debated, and many theories have been advanced to justify the tax exemption of nonprofit hospitals. In a growing number of jurisdictions, however, state and local authorities have gone beyond the theoretical debate and are challenging the tax exemption of their nonprofit hospitals. For various reasons, efforts are afoot to capture greater community benefit from nonprofit hospitals.At the heart of such challenges is the debate over the nature and extent of the duty charitable institutions owe to their communities. A demand is growing for nonprofit hospitals to earn their tax exemptions by benefiting their communities in concrete ways. Some have been stripped of their tax-exempt status by local authorities or pressured to make payments in lieu of taxes. A number of states have recently implemented initiatives in an attempt to make hospitals more accountable for their community benefits. Many hospitals are responding to this heightened scrutiny in a proactive way, by voluntarily documenting community benefits. A number of nonprofit hospitals and hospital associations are cooperating with—or even sponsoring—state legislation in this area.

State-Level Community Benefit Regulation and Nonprofit Hospitals' Provision of Community Benefits

2018 ◽  
Vol 43 (2) ◽  
pp. 229-269 ◽  
Author(s):  
Simone R. Singh ◽  
Gary J. Young ◽  
Lacey Loomer ◽  
Kristin Madison
Keyword(s):  
Community Health ◽  
State Level ◽  
Health Needs ◽  
Charity Care ◽  
Nonprofit Hospitals ◽  
Community Benefit ◽  
Minimum Income ◽  
Needs Assessments ◽  
Community Benefits ◽  
Eligibility Standards

Abstract Do nonprofit hospitals provide enough community benefits to justify their tax exemptions? States have sought to enhance nonprofit hospitals' accountability and oversight through regulation, including requirements to report community benefits, conduct community health needs assessments, provide minimum levels of community benefits, and adhere to minimum income eligibility standards for charity care. However, little research has assessed these regulations' impact on community benefits. Using 2009–11 Internal Revenue Service data on community benefit spending for more than eighteen hundred hospitals and the Hilltop Institute's data on community benefit regulation, we investigated the relationship between these four types of regulation and the level and types of hospital-provided community benefits. Our multivariate regression analyses showed that only community health needs assessments were consistently associated with greater community benefit spending. The results for reporting and minimum spending requirements were mixed, while minimum income eligibility standards for charity care were unrelated to community benefit spending. State adoption of multiple types of regulation was consistently associated with higher levels of hospital-provided community benefits, possibly because regulatory intensity conveys a strong signal to the hospital community that more spending is expected. This study can inform efforts to design regulations that will encourage hospitals to provide community benefits consistent with policy makers' goals.

scholarly journals Bundled payments for care improvement initiative – insights from the test pilots of payment reform

2015 ◽  
Vol 4 (2) ◽  
pp. 37
Author(s):  
Jason M Sutherland ◽  
William B. Borden
Keyword(s):  
Teaching Hospitals ◽  
Single Bundle ◽  
Payment Reform ◽  
Value Based Purchasing ◽  
American Hospital ◽  
American Hospital Association ◽  
Non Profit ◽  
Bundled Payments ◽  
Episodes Of Care ◽  
Care Improvement

Background: The Medicare Bundled Payments for Care Improvement (BPCI) pilot program aims to reward high-value providers by setting a global payment target for particular episodes of care. The representativeness of BPCI participants will influence the ability of this pilot to inform policy decisions.Methods: We linked the Medicare lists of participants in the risk-bearing portion of BPCI Model 2, encompassing acute and post-acute care, to the American Hospital Association resource file and the 2013 Hospital Value-Based Purchasing quality performance data. We classified episode-initiating hospitals by the number of bundles in which they were participating into “narrow”, “medium” and “comprehensive”. The analysis described the characteristics of hospitals in each of these categories.Results: The 105 hospitals with linkable data were predominantly large, urban, non-profit, teaching hospitals. These hospitals were quite similar to the general population in terms of disproportionate share, Medicare, and Medicaid percentages. Most participants selected a narrow number of bundles, with the majority selecting a single bundle around joint replacement. There were only minor differences in quality between Model 2 participants and non-participants.Conclusions: Informing the decision about whether to scale the BPCI program nationally will require evaluation of the pilot’s performance by participants’ characteristics to understand in what conditions and for which providers the program is most effective.

Hospital Ownership of Physicians: Hospital Versus Physician Perspectives

2016 ◽  
Vol 75 (1) ◽  
pp. 88-99 ◽  
Author(s):  
Laurence C. Baker ◽  
M. Kate Bundorf ◽  
Aileen M. Devlin ◽  
Daniel P. Kessler
Keyword(s):  
Research Question ◽  
Hospital Ownership ◽  
Policy Makers ◽  
American Hospital ◽  
American Hospital Association ◽  
Physician Practices ◽  
National Surveys ◽  
Physician Perspectives ◽  
Recent Trends ◽  
Ownership Patterns

Although there has been significant interest from health services researchers and policy makers about recent trends in hospitals’ ownership of physician practices, few studies have investigated the strengths and weaknesses of available data sources. In this article, we compare results from two national surveys that have been used to assess ownership patterns, one of hospitals (the American Hospital Association survey) and one of physicians (the SK&A survey). We find some areas of agreement, but also some disagreement, between the two surveys. We conclude that full understanding of the causes and consequences of hospital ownership of physicians requires data collected at the both the hospital and the physician level. The appropriate measure of integration depends on the research question being investigated.

scholarly journals Not-for-profit hospitals’ provision of community benefit during the 2008 recession: An analysis of hospitals in Maryland

2013 ◽  
Vol 3 (3) ◽  
pp. 7
Author(s):  
Simone Rauscher Singh
Keyword(s):  
Burden Of Illness ◽  
Panel Regression ◽  
Charity Care ◽  
Community Benefit ◽  
For Profit ◽  
Community Benefits ◽  
Not For Profit ◽  
Difficult Time ◽  
Using Data ◽  
Charitable Activities

During the 2008 recession, many U.S. hospitals had to lay off staff and cut services to reduce costs, yet little is known about how these cuts affected hospitals’ provision of community benefits. While the need for charitable programs and services grew during this economically difficult time, financial pressures may have forced hospitals to cut back on their community benefit spending. Using data for not-for-profit hospitals in the state of Maryland for the years 2006 to 2010, this study explored whether, and if so how, hospitals changed their provision of community benefit during the 2008 recession. The findings showed that, on average, Maryland hospitals increased their charitable activities during the recent recession. Between 2006 and 2010, total spending on community benefits grew from an average of 5.6% to 7.7% of operating expenses with the most substantial growth in hospitals’ provision of charity care and mission-driven health services. Panel regression analysis showed that this increase in charitable activity was associated with increases in community need. Hospitals’ financial performance, on the other hand, was unrelated to their community benefit spending. These findings indicate that even in times of constrained budgets, Maryland hospitals provided substantial amounts of community benefit in response to the needs of the communities they serve. Hospital-based community benefit programs thus have the potential to play an important role in on-going community-wide efforts aimed at reducing the burden of illness and improving population health.  

The Impact of IRS Tax Policy on Hospital Community Benefit Activities

2017 ◽  
Vol 76 (2) ◽  
pp. 167-183 ◽  
Author(s):  
Valerie A. Yeager ◽  
Alva O. Ferdinand ◽  
Nir Menachemi
Keyword(s):  
Community Health ◽  
Secondary Data ◽  
Community Benefit ◽  
American Hospital ◽  
American Hospital Association ◽  
For Profit ◽  
Not For Profit ◽  
Tax Exempt ◽  
Quasi Experimental ◽  
The Impact

The Internal Revenue Service (IRS) recently introduced tax code revisions requiring stricter oversight of community benefit activities (CBAs) conducted by tax-exempt, not-for-profit hospitals. We examine the impact of this tax requirement on CBAs among these hospitals relative to for-profit and government hospitals that were not subject to the new policy. We employed a quasi-experimental, difference-in-difference study design using a longitudinal observational approach and used secondary data collected by the American Hospital Association (years 2006-2010 including 20,538 hospital year observations). Findings show a significant increase in the reporting of 7 of the 13 CBAs among tax-exempt, not-for-profit hospitals compared with other hospitals after the policy change. Examples include partnering to conduct community health assessments ( b = 0.035, p = .002) and using capacity assessments to identify unmet community health needs ( b = 0.041, p = .001). Recent tax revisions are associated with increases in reported CBAs among tax-exempt, not-for-profit hospitals. As the debate continues regarding tax exemption status for not-for-profit hospitals, policy makers should expand efforts for enhanced accountability.

Sign in / Sign up

Export Citation Format

Share Document