The Accountability of Nonprofit Hospitals: Lessons from Maryland's Community Benefit Reporting Requirements

2009 ◽  
Vol 46 (2) ◽  
pp. 122-139 ◽  
Author(s):  
Bradford H. Gray ◽  
Mark Schlesinger
Keyword(s):  
Data Capture ◽  
Internal Revenue Service ◽  
Charity Care ◽  
Nonprofit Hospitals ◽  
Community Benefit ◽  
Internal Revenue ◽  
Reporting Requirements ◽  
New Community

Under Internal Revenue Service requirements, nonprofit hospitals will begin filing new community benefit reports in 2010. Maryland has had similar requirements since 2004. This paper, based on interviews at 20 hospitals, describes how Maryland's requirements affected hospitals and their activities. Increases in reported community benefit expenditures since the program began are due to both changes in activities and better data capture. Charity care accounts for one-third of community benefit dollars. A key distinction concerns whether hospitals take an accounting or managerial approach to community benefit. The Maryland experience suggests the issues that will arise when the national requirements are implemented.

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.

Charity Care Characteristics and Expenditures Among US Tax-Exempt Hospitals in 2016

2020 ◽  
Vol 110 (4) ◽  
pp. 492-498 ◽  
Author(s):  
Christopher W. Goodman ◽  
Amber Flanigan ◽  
Janice C. Probst ◽  
Allan S. Brett
Keyword(s):  
Affordable Care Act ◽  
Web Sites ◽  
Health Care Services ◽  
Internal Revenue Service ◽  
Charity Care ◽  
Community Benefit ◽  
Care Services ◽  
Tax Exempt ◽  
Potential Benefits ◽  
Eligibility Requirements

Objectives. To examine content of financial assistance polices (FAPs) among US tax-exempt hospitals and determine whether restrictive policies were associated with reduced charity care spending. Methods. Using hospital tax filings with the Internal Revenue Service in 2016 and FAPs obtained from hospital Web sites, we examined characteristics of FAPs and associated expenditures for charity care in a representative sample of 170 tax-exempt hospitals. We identified common eligibility requirements and used them to define restrictiveness of FAPs. Results. FAPs were characterized by various ways to exclude patients, a patchwork of coverage for typical health care services, and wide-ranging discounts. FAP expenditures were lowest among restrictive hospitals in states that expanded Medicaid as part of the Affordable Care Act and highest among nonrestrictive hospitals in nonexpansion states. FAP expenses did not differ by hospital restrictiveness alone. Conclusions. Standardizing common eligibility requirements among FAPs carries potential benefits with regard to optimizing charity care for community benefit and achieving at least some level of equity; however, further policy efforts must account for additional restrictions, charges, and exclusions to be effective.

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.

Hospital Charity Care — Effects of New Community-Benefit Requirements

2015 ◽  
Vol 373 (18) ◽  
pp. 1687-1690 ◽  
Author(s):  
Sayeh S. Nikpay ◽  
John Z. Ayanian
Keyword(s):  
Charity Care ◽  
Community Benefit ◽  
New Community

scholarly journals Is Federal Tax-Exemption Policy for Nonprofit Hospitals Moving to a Clearer Quid pro Quo Basis?

2012 ◽  
Vol 3 (1) ◽  
Author(s):  
Beaufort B. Longest
Keyword(s):  
Tax Policy ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Internal Revenue Service ◽  
Tax Policies ◽  
Nonprofit Hospitals ◽  
Internal Revenue ◽  
Exemption Policy ◽  
Income Tax Policy ◽  
Modern Era

The question of whether federal tax-exemption policy for nonprofit hospitals is moving to a clearer and more robust quid pro quo basis is examined. The question is important because heretofore the basis for federal exemption has been vague and fluid. Utilizing a quid pro quo rationale for federal tax-exemption of nonprofit hospitals as a framework, the chronological record of policy in this area is organized into three major periods: (1) A Simple Quid pro Quo: Early Federal Tax Policies for Nonprofit Hospitals; (2) A Changing Quid pro Quo: The Modern Era of Federal Tax Policy for Nonprofit Hospitals; and (3) An Emergent, Clearer Quid pro Quo: Recent Congressional Activism on Exemption Policy, including relevant provisions of the ACA. The article concludes with discussion of continuing vagueness and ambiguity in federal corporate income tax policy for nonprofit hospitals. The importance of enhanced clarity and specificity in the information upon which policy in this area is based is discussed, as are actions needed by Congress and the Internal Revenue Service to accomplish improved exemption policy.

Tax Practitioner Credentials and the Incidence of IRS Audit Adjustments

2003 ◽  
Vol 17 (1) ◽  
pp. 1-14 ◽  
Author(s):  
Peggy A. Hite ◽  
John Hasseldine
Keyword(s):  
Random Selection ◽  
Internal Revenue Service ◽  
Internal Revenue ◽  
Tax Returns ◽  
Selection Of

This study analyzes a random selection of Internal Revenue Service (IRS) office audits from October 1997 to July 1998, the type of audit that concerns most taxpayers. Taxpayers engage paid preparers in order to avoid this type of audit and to avoid any resulting tax adjustments. The study examines whether there are more audit adjustments and penalty assessments on tax returns with paid-preparer assistance than on tax returns without paid-preparer assistance. By comparing the frequency of adjustments on IRS office audits, the study finds that there are significantly fewer tax adjustments on paid-preparer returns than on self-prepared returns. Moreover, CPA-prepared returns resulted in fewer audit adjustments than non CPA-prepared returns.

The Effects of Capital Campaigns on Local Nonprofit Ecologies

2018 ◽  
Vol 47 (3) ◽  
pp. 645-656 ◽  
Author(s):  
Joanna Woronkowicz
Keyword(s):  
Nonprofit Organizations ◽  
Internal Revenue Service ◽  
Arts Organizations ◽  
Natural Distribution ◽  
Capital Campaign ◽  
Internal Revenue ◽  
Capital Campaigns ◽  
Short Period ◽  
Distribution Of Resources ◽  
Nonprofit Arts

When charities launch capital campaigns, they hope to attract large amounts of resources in a relatively short period of time; however, other charities in the area are likely to see such campaigns as disruptive to the natural distribution of resources to area nonprofits by disproportionately directing area donations to a single organization. This study seeks to understand the effects capital campaigns have on both the fundraising performance of other nonprofits and the makeup of a local nonprofit ecology. The analysis uses data from a randomly sampled set of nonprofit arts organizations that had capital campaigns for facilities projects between 1994 and 2007 and Internal Revenue Service Form 990 data on 501 (c) (3) nonprofit organizations in each county. The results illustrate that a capital campaign positively affects the fundraising performance of other charities in a local nonprofit ecology, but that campaigns decrease the size of a local nonprofit ecology.

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