The next wave of healthcare consolidation

https://mailchi.mp/a40e674b8d4a/the-weekly-gist-2021-special-edition?e=d1e747d2d8

Might health care consolidation be slowing and if so, why and what might it  mean? A perspective on where we are, how we got here and what is next. —  CASTLING PARTNERS

With many deals delayed by the pandemic, 2020 turned out to be slower than anticipated for hospital mergers and acquisitions. But we’d expect the pace of mergers to quicken this year as health systems emerge from the winter COVID surge. The calculus centers on both strategy and security.

Having weathered the pandemic better than expected, many larger systems approach the market as opportunists, looking expand their reach and capabilities. And systems of all sizes are seeking scale to enable better access to capital and greater risk mitigation—now viewed as essential should they once again face a pandemic-sized shock.

As systems contemplate new combinations, they would be wise to learn from the high-profile combinations that fell apart last year. In our experience, many mergers are felled by the “social” issues: board seat allocation, leadership structures, or cultural mismatches. These types of challenges appeared to be behind the stalling of Advocate Aurora Health’s merger with Beaumont Health (which faced pushback from doctors and community stakeholders) and the demise of the combination of Intermountain Healthcare and Sanford Health (called off amid leadership turnover). 

Any successful merger must not only present the financial rationale for partnership, but also make a clear case as to how a combined system will bring new capabilities that will improve care, access and experience for local consumers.

Expect scrutiny on deals to rise in the Biden administration with the likely confirmation of Department of Health and Human Services (HHS) Secretary nominee Xavier Becerra, who took a strict antitrust posture in reviewing hospital mergers and contracting during his tenure as California’s attorney general.

California AG conditionally approves $350M sale of nonprofit to Prime Healthcare

https://www.healthcarefinancenews.com/news/california-ag-conditionally-approves-350m-sale-st-francis-medical-center-prime-healthcare

Prime Healthcare, CEO Prem Reddy settle false-claims suit for $65M

Prime will acquire St. Francis for a net of $350 million, with a $200 million base cash price and $60 million for accounts receivable.

California Attorney General Xavier Becerra has conditionally approved Verity Health’s application to transfer ownership of St. Francis Medical Center to Prime Healthcare. The Attorney General’s decision follows an earlier decision by the U.S. Bankruptcy Court of the Central District of California granting Verity’s request to reject the existing collective bargaining agreements which impose legacy cost structures that it said contributed to bankruptcy.

Becerra noted that his approval of the sale of St. Francis to Prime Healthcare “protect(s) access to care for the Los Angeles communities served” by St. Francis.

“The COVID-19 public health crisis has brought home the importance of having access to lifesaving hospital care nearby in our communities,” he said. “St. Francis Medical Center is not just an asset, it is an indispensable neighbor, it is the workers who serve the patients, and the doctors who save lives. We conditionally approve this sale to keep it that way.”

Prime Healthcare has built a reputation for saving financially distressed hospitals across the U.S., touting improved clinical quality. Healthgrades said Prime had hospitals named among the nation’s 100 best 53 times, and has been the recipient of several Patient Safety Excellence Awards.

The Attorney General’s office conducted an exhaustive review of the transaction for the past several months and carefully considered public input on the proposed transaction. The Attorney General’s approval includes conditions for the sale which Prime is currently reviewing. Pending a final ruling by the Bankruptcy Court, the transaction is expected to be completed this summer.

THE LARGER TREND

In early April, the U.S. Bankruptcy Court approved the Asset Purchase Agreement for the sale of St. Francis Medical Center to Prime. Under the agreement, Prime will acquire St. Francis for a net consideration of over $350 million, including a $200 million base cash price and $60 million for accounts receivable. In addition, Prime has committed to invest $47 million in capital improvements and extend offers of employment to nearly all staff.

The court also recently granted Verity’s request to reject the existing collective bargaining agreements with two unions that represent associates at St. Francis Medical Center, SEIU and UNAC. The court noted that Prime Healthcare was the only party to submit a qualifying bid for St. Francis and that without rejecting the existing CBAs, “St. Francis would not continue to operate as a going concern, and all of the UNAC (and SEIU) represented employees would lose their jobs.”

The court also noted that Prime and Verity had made multiple efforts to negotiate in good faith with the unions, and the parties devoted “hundreds of hours to negotiations,” but ultimately were unable to agree on new CBAs. Further, the court determined that one of the reasons for the hospital’s bankruptcy was the “legacy cost structure imposed by the existing CBAs.”

It then staid that the proposals were rejected “without good cause” by the unions. Prime said it negotiated in good faith and proposed increasingly generous offers to UNAC and SEIU with wages far above its existing agreements at its Los Angeles-area hospitals. Prime’s latest offer to SEIU maintained existing wages for roughly 90% of SEIU members, and increased wages for some of them. Prime said these wages would be substantially higher than those recently voted by SEIU members at three of Prime’s Los Angeles hospitals.

ON THE RECORD

“Receiving conditional approval is an important step in ensuring Prime is able to preserve the St. Francis mission for the benefit of associates, members of the medical staff and most importantly the patients and Southeast Los Angeles community that has relied on St. Francis for 75 years,” said Rich Adcock, CEO of Verity Health.

“We are honored to be selected to continue the St. Francis legacy and are working to review the conditions and finalize the sale as quickly as possible,” said Dr. Sunny Bhatia, CEO, Region I and chief medical officer of Prime Healthcare. “St. Francis’ mission is especially critical during this pandemic and we honor the service of all caregivers. Prime has already started investments at St. Francis that will enhance patient care as we commit to continue every service line, community benefit program, charity care and expand new services to the community.”

 

 

 

Why Are Nonprofit Hospitals So Highly Profitable?

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These institutions receive tax exemptions for community benefits that often don’t really exist.

“So, how much money do you guys make if I do that test you’re ordering for me?” This is a question I hear frequently from my patients, and it’s often followed by some variant of, “I thought hospitals were supposed to be nonprofit.”

Patients are understandably confused. They see hospitals consolidating and creating vast medical empires with sophisticated marketing campaigns and sleek digs that resemble luxury hotels. And then there was the headline-grabbing nugget from a Health Affairs study that seven of the 10 most profitable hospitals in America are nonprofit hospitals.

Hospitals fall into three financial categories. Two are easy to understand: There are fully private hospitals that mostly function like any other business, responsible to shareholders and investors. And there are public hospitals, which are owned by state or local governments and have obligations to care for underserved populations. And then there are “private nonprofit” hospitals, which include more than half of our hospitals.

Nearly all of the nation’s most prestigious hospitals are nonprofits. These are the medical meccas that come to mind when we think of the best of American medicine — Mayo Clinic, Cleveland Clinic, Johns Hopkins, Mass General.

The nonprofit label comes from the fact that they are exempt from federal and local taxes in exchange for providing a certain amount of “community benefit.”

Nonprofit hospitals have their origins in the charity hospitals of the early 1900s, but over the last century they’ve gradually shifted from that model. Now their explosive growth has many questioning how we define “nonprofit” and what sort of responsibility these hospitals have to the communities that provide this financial dispensation.

It’s time to rethink the concept of nonprofit hospitals. Tax exemption is a gift provided by the community and should be treated as such. Hospitals’ community benefit should be defined more explicitly in terms of tangible medical benefits for local residents.

It actually isn’t much of a surprise that nonprofit hospitals are often more profitable than for-profit hospitals. If a private business doesn’t have to pay taxes, its expenses will be lower. Additionally, because nonprofit hospitals are defined as charitable institutions, they can benefit from tax-free contributions from donors and tax-free bonds for capital projects, things that for-profit hospitals cannot take advantage of.

The real question surrounding nonprofit hospitals is whether the benefits to the community equal what taxpayers donate to these hospitals in the form of tax-exempt status.

On paper, the average value of community benefits for all nonprofits about equals the value of the tax exemption, but there is tremendous variation among individual hospitals, with many falling short. There is also intense disagreement about how those community benefits are calculated and whether they actually serve the community in question.

Charity medical care is what most people think of when it comes to a community benefit, and before 1969 that was the legal requirement for hospitals to qualify for tax-exempt status. In that year, the tax code was changed to allow for a wide range of expenses to qualify as community benefits. Charitable care became optional and it was left up to the hospitals to decide how to pay back that debt. Hospitals could even declare that accepting Medicaid insurance was a community benefit and write off the difference between the Medicaid payment and their own calculations of cost.

An analysis by Politico found that since the full Affordable Care Act coverage expansion, which brought millions more paying customers into the field, revenue in the top seven nonprofit hospitals (as ranked by U.S. News & World Report) increased by 15 percent, while charity care — the most tangible aspect of community benefit — decreased by 35 percent.

Communities are often conflicted about the nonprofit hospitals in their midst. Many of these institutions are enormous employers — sometimes the largest employer in town — but the economic benefits do not always trickle down to the immediate neighborhoods. It is not unusual to see a stark contrast between these gleaming campuses and the disadvantaged neighborhoods that surround them.

In some communities, nonprofit hospitals are beloved institutions with a history of caring for generations of families. In other communities, the sums of money devoted to lavish expansions, aggressive advertising and eye-popping executive compensation are a source of irritation.

The average chief executive’s package at nonprofit hospitals is worth $3.5 million annually. (According to I.R.S. regulations, “No part of their net earnings is allowed to inure to the benefit of any private shareholder or individual.”) From 2005 to 2015, average chief executive compensation in nonprofit hospitals increased by 93 percent. Over that same period, pediatricians saw a 15 percent salary increase. Nurses got 3 percent.

A number of communities that think nonprofit hospitals take more than they give back have started to sue. The University of Pittsburgh Medical Center fought off one lawsuit from the city’s mayor to revoke its tax-exempt status. Last year it faced another from the Pennsylvania attorney general, alleging that the medical center, valued at $20 billion, did not fulfill “its obligation as a public charity” (the lawsuit was dismissed).

Morristown Hospital in New Jersey lost most of its property-tax exemption because it was found to be behaving as a for-profit institution. The judge in the case wrote that if all nonprofit hospitals operated like this, then “modern nonprofit hospitals are essentially legal fictions.”

It’s important to recognize the extreme variance in hospitals’ financial status. Many nonprofit hospitals, especially in rural areas, struggle mightily; scores of rural hospitals have closed — and hundreds more are teetering — leading to spikes in local death rates. At the other end are hospitals that earn several thousand dollars in profit per patient.

The most profitable nonprofit hospitals tend to be part of huge health care systems. Consolidations are one of the driving forces behind the towering profits, because monopoly hospitals are known to charge more than nonmonopoly hospitals.

Should these highly profitable institutions be exempt from the taxes that pay for local roads, police services, fire protection and 911 services? Should local residents have to pay for the garbage collection for institutions that can afford multimillion-dollar salaries for top executives?

Tax exemption needs to be redefined. Low-impact projects such as community health fairs that function more like marketing shouldn’t be allowed as part of the calculation. Nor should things that primarily benefit the institution, like staff training.

Additionally, hospitals should not be allowed to declare Medicaid “losses” as a community benefit. While it’s true that Medicaid typically pays less than private insurance companies, Medicaid plays a crucial role for private insurance markets by acting as a high-risk pool for patients with severe illness and disability. Hospitals benefit mightily from this taxpayer-funded arrangement. These large medical centers also enthusiastically accept taxpayer money for research, something that burnishes their image and bolsters their rankings. That enthusiasm needs to be mandated to extend toward Medicaid patients and the face value of their insurance.

The I.R.S. states that charitable hospitals “must be organized and operated exclusively for specific tax-exempt purposes.” Thus charitable care should be front and center. Spending on social determinants of health can also be a legitimate community benefit, but the community that is footing the tax break needs to have a forceful say in how this money is spent, rather than leave it solely up to the hospital.

As many policy scholars have noted, tax exemption is a blunt instrument. For struggling hospitals, particularly in communities with a shortage of health care resources, tax exemption can make sense. In medically saturated areas, where profits and executive compensation approach Wall Street levels, tax exemption should raise eyebrows.

If society decides that tax exemption is a worthwhile means to improve health — and it certainly can be — then our regulations need to be far stricter and more explicitly tied to community health. As the United States continues to fall behind its international peers in terms of health outcomes in local communities, there is certainly no lack of opportunity.

 

 

 

Trust issues plague the relationship between Ascension St. Joe’s and the community it serves

https://www.jsonline.com/story/news/health/2019/12/16/st-joes-accountability-coalition-seek-commitment-ascension-hospital/3831008002/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202019-12-17%20Healthcare%20Dive%20%5Bissue:24684%5D&utm_term=Healthcare%20Dive

Image result for ascension st joseph hospital milwaukee

Three empty chairs at a community meeting epitomized the mistrust between the leaders of Ascension Wisconsin and the St. Joe’s Accountability Coalition.

The coalition, composed primarily of community leaders from Milwaukee’s north side, invited Ascension Wisconsin to that Oct. 1 meeting to press the health system to sign a legal contract binding it to a list of commitments. The commitments included keeping Ascension St. Joseph hospital open and providing an urgent care clinic, affordable housing assistance, local hiring, more employee training and living wages for all employees.

Ascension didn’t show.

For one, Ascension Wisconsin officials said they were told they would not be allowed to speak at the event. For another, they said signing a contract was unnecessary because they have promised to keep the hospital open, already hire locally and provide employee training.

The hospital, which employs about 800 people, is one of the neighborhood’s largest employers.

The coalition wants the hospital to sign a community benefits agreement, known as a CBA, which is a contract between community groups and real estate developers or government entities.

Reggie Newson, Ascension Wisconsin’s vice president of government and community services, said the health system is proving its commitment to the community by expanding and adding services to St. Joseph.

For example, two certified nurse-midwives were just hired for the hospital’s new midwifery clinic and a third is being recruited. The hospital is also planning to hire a cardiac nurse practitioner and cardiologist.

But members of the coalition aren’t convinced, because they say there is no legal penalty if Ascension fails to follow through on its promises.

Nate Gilliam, an organizer with the Wisconsin Federation of Nurses & Health Professionals, advisory board member of the University of Wisconsin Population Health Institute and coalition spokesman, said the coalition just wants accountability.

“It’s good that they’re saying all these great things on paper and to the media,” he said. “But if they are going to do that, they shouldn’t have a problem with signing a CBA.”

Future bright despite history of mistrust, Ascension says

The lack of trust between the coalition and Ascension Wisconsin started 18 months ago, when hospital administrators — citing losses of roughly $30 million a year — proposed cutting some of Ascension St. Joseph’s surgical and medical units and other services, such as cardiology support.

The hospital, at 5000 W. Chambers St., serves a majority African American population on the city’s north side, an area facing steep socioeconomic disadvantages. Decades of limited access to health care have contributed to higher rates of chronic disease. Higher rates of poverty means many residents rely on Medicaid for health insurance.

Residents interpreted Ascension’s proposal as a precursor to closing the hospital and — in an area where transportation is scarce — feared they would have to go farther for health care.

The proposal was criticized by Mayor Tom Barrett, several aldermen and community leaders, including George Hinton, CEO of the Social Development Commission and former president of Aurora Sinai Medical Center, who wrote an op-ed in opposition.

Ascension dropped the proposal.

But that was 18 months ago.

Since then, Newson said the hospital surveyed more than 1,000 people by telephone and held five community listening sessions. The information was used to develop priorities for the hospital and corresponding programs, such as the midwifery program and heart and vascular community care center.

Similarly, members of the coalition conducted their own survey, knocking on hundreds of doors and collecting 584 detailed responses.

When surveyed on non-clinical services, over 40% of residents said housing assistance, local hiring and living wages were their top priorities. From the coalition’s survey on clinical services, 61.6% said access to urgent care was most important to them.

Kevin Kluesner, Ascension St. Joseph’s chief administrative officer, said he and others are well aware of the health disparities and disadvantages within the community they serve.

He said Ascension Wisconsin’s push to expand services is proof the hospital isn’t going anywhere.

That commitment is despite the hospital’s having lost roughly $150 million since the 2012 fiscal year. In the 2018 fiscal year, the most recent for which information is available, Ascension St. Joseph lost $31.6 million.

By comparison, Froedtert Hospital reported $134 million in profits for the 2018 fiscal year, according to information filed with the Wisconsin Hospital Association. Aurora St. Luke’s Medical Center reported $166 million in profits in 2018.

Gilliam said that since the hospital is a non-profit venture, lost profits shouldn’t matter. He also said that Ascension Wisconsin has more profitable locations across the state, that can offset the losses at St. Joseph.

Coalition wants accountability

The results from the coalition’s survey mirrored what residents at the Oct. 1 community meeting described.

Charles Hawkins said he likes his primary care physicians, but said they keep leaving.

Another resident who lives blocks away from the hospital, Arkesia Jackson, said when her brother-in-law experienced a flare-up of his COPD, or chronic obstructive pulmonary disease, she was thankful a community hospital was nearby.

“He ran inside the emergency and collapsed, car running,” she said. “He is a patient at St. Joe’s. They had all his records, they knew who he was, they knew what he was suffering from.”

Newson said the goal is to provide consistent, quality care for all patients.

Gilliam acknowledged that details of what the coalition is asking for, such as racially equitable health care and helping with housing assistance, are somewhat vague. However, that’s because its members said they want to sit down with Ascension and hammer out an agreement — as long as Ascension commits to signing one.

Coalition members argue that other hospitals have worked with community groups on similar initiatives.

Robert Silverman, a professor in the Department of Urban and Regional Planning at the University of Buffalo, said there are some rare examples of CBAs being used in the health care field.

For example, Yale University signed a CBA with the Community Organized for Responsible Development group in 2006 regarding the construction of a new cancer center.

It still remains unlikely that Ascension, a national organization, would willingly set such a precedent for its hospitals.

Gilliam said he thinks it’s important for hospitals to be accountable to the community.

“I don’t see why they see a community benefits agreement as adversarial off the top,” Gilliam said. “Whenever they’re ready to come to the table in earnest, we’ll be there. That’s it.”

But with the addition and expansion of several new programs, Kluesner said he’s not sure what else hospital officials can do to prove they are serious about being a reliable anchor institution on the city’s north side.

“We’ve signed 11 new providers. That’s the best proof we could give of our commitment to growing services here at St. Joseph. If people are wondering what are we doing at Ascension St. Joseph, I think that actions speak louder than words,” he said.

 

Memphis hospital CEOs discuss policies on debt collection after patient lawsuits draw scrutiny

https://www.commercialappeal.com/story/news/2019/12/05/medical-debt-memphis-hospital-patients-sued/2611018001/

Dr. Reginald Coopwood, CEO of Regional One Health, on Feb. 5, 2016.

Representing more than half of the hospitals in Shelby County, the CEOs of four local health care organizations convened at the University of Memphis Tuesday for a panel on “successfully leading change” in the industry.

The gathering took place amid a growing conversation on medical debt — the cause of more than 58 percent of bankruptcies in the United States, according to the American Journal of Public Health. 

Communities across the countries have recently seen individuals and faith-based organizations launch fundraising initiatives to erase millions in medical expenses as part of a burgeoning movement to buy medical debt for the sole purpose of erasing it.

Memphis has also been at the fore of the conversation in recent months, with a pair of investigations by MLK50 and ProPublica revealing an aggressive system of suing patients involving wage garnishments, interest charges and court fees.

That reporting has since prompted a wave of debt reduction and forgiveness for thousands who were being sued by Methodist Le Bonheur Healthcare and Southeastern Emergency Physicians, a private equity-owned firm that staffs Baptist Memorial Health Care’s four local emergency rooms.

‘We have to be a profitable business’

At the Tuesday panel, organized by the professional association Mid-South Health Care Executives, the discussion touched on workplace harassment, the impending automation of health care jobs, and diversity.

The CEOs of Methodist Le Bonheur and Baptist Memorial also addressed medical debt as did their fellow panelists.

Dr. Reginald Coopwood, CEO of Regional One Health, the county hospital, said his organization was compelled to reassess its policies as a result of the recent scrutiny surrounding debt collection, though he defended the practice of suing patients in general.

“We send people through processes of collection,” Coopwood said of the public hospital.

“We have a great passion to deliver great care to whoever walks into our door. The flip side of that is … if everybody cannot pay their bills, we can’t buy $100 million record systems and we can’t buy technology that the community as a whole wants,” Coopwood said. “So we have policies to collect whatever is collectible from individuals.”

“That’s what a business needs to do,” he said.

According to General Sessions Court data, analyzed by MLK50 and ProPublica and shared with The Commercial Appeal, those hospitals and a physicians staffing firm, sued more than 2,500 patients in the first six months of the year, between January 1 and June 30:

  • Baptist Memorial Hospital, 486 lawsuits
  • Methodist Le Bonheur, 622 lawsuits
  • Regional One Health, 161 lawsuits
  • Southeastern Emergency Physicians, 1,292 lawsuits

“At the end of the day, we’re businesses, and in order to stay in business, we have to be able — in order to take care of those that are uninsured — we have to be a profitable business,” Coopwood said.

Sally Deitch, CEO of St. Francis Hospitals in Memphis, said the amount of charity care hospitals give back to communities is rarely seen, and, meanwhile, “most of these hospitals are living under their margins of actually being able to say ‘We are financially solid and stable and ready to make investments in new technology.'”

In a Memphis Business Journal review of nonprofit tax filings, Coopwood, Methodist Le Bonheur CEO Michael Ugwueke and Baptist Memorial Health Care CEO Jason Little are listed among the five highest paid nonprofit executives in the metro area, earning between $874,493 and $1,300,954 in 2018. Deitch was appointed to her position in October, after the Memphis Business Journal’s compensation review.

‘No one is perfect’

In the Methodist Le Bonheur system, MLK50 and ProPublica’s investigation found the nonprofit hospital’s practice of taking patients to court, through its in-house collection agency, had entrapped some of its own workers in a cycle of wage garnishments, interest and debt — while they were being paid less than a living wage.

Ugwueke, president of Methodist Le Bonheur’s hospitals in Shelby County, said his organization has gone “above and beyond the issues that were raised.”

The hospital, which is affiliated with the United Methodist Church, announced in July it would cease suing its employees and would raise the hospital network’s minimum wage to $15 an hour.

Methodist Le Bonheur also said it would institute a revamped financial assistance policy to ensure no one making less than 250 percent of federal poverty guidelines would be sued for debt collection in the future. For the approximately 6,500 patients who were in the process of being sued, the hospital also committed to forgiving or reducing their debts.

“As part of our process, we have made additional changes and accommodations,” Ugwueke said. “No one is perfect. I don’t think it’s anyone’s intention to do anything to harm patients.”

He added that he thinks other institutions have a role to play in serving the needs of low-income and poor communities.

“Memphis is a very challenging community. Health care organizations are not going to be the only ones solving the problems,” he said.

Deitch said no one seeking emergency care would ever be turned away from any hospital. Beyond that, she said she considered hospitals to be participants in helping their communities but not a deciding factor.

“When you start to think through the cost to the system and the burden to the system — at a certain point, it can’t all be the responsibility of a hospital,” she said.

Charity care

Little said he  thinks hospitals should address problems with affordability.

“We still need change in health care because it’s expensive. … Seventy-five percent of Americans are living paycheck to paycheck,” Little said, “and nobody sets money aside and plans to need a transplant. So that’s a challenge for all Americans and all Memphians.”

“And it’s a challenge that I’m really bullish on my colleagues up here continuing to address,” Little said, “because I think we’ve gotten really good at caring for our communities, particularly those in the greatest of need.”

For every dollar spent on expenses, Little said, Baptist Memorial spends 21 cents of it on charity care.

But that financial assistance hasn’t always been accessible to emergency-room patients, MLK50 and ProPublica reported in an investigation into Southeastern Emergency Physicians. The staffing firm contracts with doctors to treat emergency room patients in four of Baptist’s five hospitals in the region.

Southeastern filed nearly 1,300 lawsuits in the first half of 2019, according to MLK50 and ProPublica’s analysis of General Sessions Court data — more lawsuits than Regional One, Baptist Memorial and Methodist Le Bonheur combined.

But by the end of the year, in response to the MLK50 and ProPublica investigation, the firm’s parent company, TeamHealth, said it promote financial assistance program participation and would no longer pursue its active lawsuits — or sue any patients again.

 

 

What Makes A Non-Profit Hospital?

What Makes A Non-Profit Hospital?

Image result for What Makes A Non-Profit Hospital?

What are non-profit hospitals and what is the community benefit standard?

Recently, several news outlets including ProPublicaKaiser Health News, and Wall Street Journal have published stories on non-profit hospitals’ medical debt collection practices and the effects on low income patients. These news stories prompted me to take a closer look at non-profit hospitals, their tax-exempt status, the community benefits they must fulfill to qualify for it, and the impact on care.

This is the first piece of two posts that consider the requirements that non-profit hospitals need to fulfill to qualify for their tax-exempt status and the impact of these standards on non-profit hospitals and the communities they seek to serve.

Has the definition of a non-profit hospital evolved over time?

Short answer: yes.

To date, non-profit hospitals have significantly benefited from their tax-exempt status, saving $24.6 billion in taxes in 2011. Originally, hospitals were granted tax-exempt status because of affiliations with religious institutions and for serving a charitable purpose. It wasn’t necessarily related to medical care. However, in 1956, the Internal Revenue Service (IRS) implemented the charity care standard requiring hospitals to offer uncompensated care to patients unable to pay in order to qualify as a charitable organization under Internal Revenue Code 501c3.

Many believed charity care would no longer be necessary after the implementation of Medicare and Medicaid in 1965. Policymakers assumed the two programs would ensure insurance coverage for most people, obviating the need for a charity care standard. This wasn’t the case, and over the next decade, two events led to the elimination of the charity care standard and the introduction of its successor, the community benefit standard, in 1969.

First, the House of Representatives released a report citing concerns about the execution of the charity care standard and its effectiveness. Second, a hospital that did not provide free or discounted health care mounted a legal challenge. The hospital asserted that, because it had an emergency room open to all community members, it was already providing a charitable service and should qualify for non-profit, or 501c3, status. The courts agreed with the hospital, stating that the provision of an open-access emergency room promoted the health of the community. This fulfilled a charitable purpose according to its legal definition. Ultimately, the IRS agreed with the court’s decision and deemed it necessary to change the charity care standard to accommodate this decision.

Consequently, the IRS issued Ruling 69-545, introducing the community benefit standard. From its implementation and onwards instead of being judged solely on the provision of free or discounted care, a hospital’s 501c3 status would be based on whether it “promoted the health of a broad class of individuals in the community,” including but not limited to just providing free or discounted care.

In 2010, additional requirements were included in the community benefit standard. Non-profit hospitals are now required to perform a community health needs assessment every three years and have both an accessible Financial Assistance Policy and Emergency Medical Care Policy (a charge limit for people who qualify for financial assistance and a billings) and a collections system that determines if individuals are eligible for financial assistance prior to engaging in extraordinary collection actions (applies to all emergency and medically necessary care).

What does non-profit status mean for hospitals?

Short answer: tax-exempt with charity donations required.

Most hospitals in the United States are recognized as charitable organizations, with 78 percent qualifying for 501c3 status. This means they are exempt from most taxes and benefit from tax-deductible charity donations and tax-exempt bond financing but they must meet general Internal Revenue Code requirements, including the community benefit standard aimed at improving the health of the surrounding community.

A variety of activities qualify as community benefits. Some examples are charity care, unreimbursed costs through means-tested programs (Medicaid, Medicare, CHIP, etc.), unreimbursed health professions education, unfunded research, and cash and in-kind contributions for community benefits. Hospitals must submit IRS Form 990 Schedule H annually to demonstrate their community benefit expenditures and maintain their 501c3 designations.

Are non-profit hospitals behaving like their for-profit counterparts?

Short answer: often times, yes.

Seven of the ten most profitable hospitals in the country are non-profits. Many of these exhibit for-profit characteristics such as being part of a larger hospital system, being located in urban areas, and not having a teaching program.

But these aren’t the only features of non-profit hospitals that resemble for-profits.study conducted by the Kellogg School of Management found that non-profits regularly behaved like for-profits after financial shocks. In response to financial crises, non-profits cut back on unprofitable services to offset losses instead of increasing prices. This is not what we expect; the study authors argue that we should expect them to do the latter — forgoing financial gain by starting with lower prices with room to increase in times of financial stress. That they don’t suggests that non-profits are already maximizing profits, similar to for-profit hospitals.

While it is unusual for non-profit hospitals to experience large financial profits, it does happen. The question is whether these gains are then reinvested into the hospital’s charity care and community health and wellbeing initiatives.

How much of a non-profit hospital’s revenue goes back into care and its community?

Short answer: some.

Herring, et al. found that, on average, 7.6 percent of non-profit hospitals’ 2012 total expenses were community benefit expenditures, 3 percent were unreimbursed Medicaid costs, and about 2 percent were charity care. (These findings are consistent with past studies.)

In some cases, non-profit hospitals receive tax benefits that far outweigh their community benefit investments. For example, in fiscal year 2011-2012, the University of Pennsylvania Medical Center made approximately $1 billion in profits, spent less than $20 million on charity care, and received $200 million in tax benefits. Cases like these have increased public scrutiny on hospitals’ non-profit status and whether current 501c3 requirements go far enough to ensure that hospitals provide sufficient charity care and community benefits.

Non-profit hospitals maintain their tax exempt status through the fulfillment of the community benefits standard. In the next piece we will look at the impact of these standards on the hospitals and the communities they serve.

 

WHY HOSPITALS ARE GETTING INTO THE HOUSING BUSINESS

https://www.healthleadersmedia.com/clinical-care/why-hospitals-are-getting-housing-business

Hospitals cannot discharge patients if they have no safe place to go, so patients who are homeless, frail, living alone, or experiencing an unstable housing situation, can occupy hospital beds long after their acute medical problem is resolved.

One patient at Denver Health, the city’s largest safety net hospital, occupied a bed for more than four years—a hospital record of 1,558 days.

Another admitted for a hard-to-treat bacterial infection needed eight weeks of at-home IV antibiotics, but had no home.

A third, with dementia, came to the hospital after being released from the Denver County Jail. His family refused to take him back.

In the first half of this year alone, the hospital treated more than 100 long-term patients. All had a medical issue that led to their initial hospitalization. But none of the patients had a medical reason for remaining in the hospital for most of their stay.

Legally and morally, hospitals cannot discharge patients if they have no safe place to go. So patients who are homeless, frail or live alone, or have unstable housing, can occupy hospital beds for weeks or months—long after their acute medical problem is resolved. For hospitals, it means losing money because a patient lingering in a bed without medical problems doesn’t generate much, if any, income. Meanwhile, acutely ill patients may wait days in the ER to be moved to a floor because a hospital’s beds are full.

“Those people are, for lack of a better term, stranded in our hospital,” said Dr. Sarah Stella, a Denver Health physician.

To address the problem, hospitals from Baltimore to St. Louis to Sacramento, Calif., are exploring ways to help patients find a home. With recent federal policy changes that encourage hospitals to allocate charity dollars for housing, many hospitals realize it’s cheaper to provide a month of housing than to keep patients for a single night.

Hospital executives find the calculus works even if they have to build affordable housing units themselves. It’s why Denver Health is partnering with the Denver Housing Authority to repurpose a mothballed building on the hospital campus into affordable senior housing, including about 15 apartments designated to help homeless patients transition out of the hospital.

“This is an experiment of sorts,” said Peg Burnette, the hospital’s chief financial officer. “We might be able to help better their lives, as well as help the financials of the hospital and help free up capacity for the patients that need to come to see us for acute care.”

SPENDING TO SAVE MONEY

Denver Health once used the shuttered 10-story building for office space but opted to sell it to the housing authority and grant a 99-year lease on the land for a minimal fee.

“It really lowers the construction costs for us,” said Ismael Guerrero, Denver Housing Authority’s executive director. “It was a great opportunity to build additional housing in a location that’s obviously close to the hospital, close to public transit, near the city center.”

Once the renovation is complete in late 2021, the housing group will hire a coordinator to assist tenants with housing-related issues, including helping those in the transitional units find permanent housing. The hospital will provide a case manager to help with their physical and behavioral health needs, preparing them for life on their own. Denver Health expects most patients will be able to move on from the transitional units within 90 days.

The hospital will pay for the housing portion itself. That will still be far cheaper than what the hospital currently spends.

It costs Denver Health $2,700 a night to keep someone in the hospital. Patients who are prime candidates for the transitional units stay on average 73 days, for a total cost to the hospital of nearly $200,000. The hospital estimates it would cost a fraction of that, about $10,000, to house a patient for a year instead.

“The hospital really is like the most expensive form of housing,” Stella said.

GROWING INTEREST

recent report from the Urban Institute found that while most hospital officials are well aware of how poor housing affects a patient’s recovery, they were stymied about how to address the issue.

“It’s on the radar of almost all hospitals,” said Kathryn Reynolds, who co-authored the report. “But it seemed like actually making investments in housing, providing some type of financing or an investment in land or something that has a good amount of value seems to be less widespread.”

The report found housing investment has been more likely among hospitals with their own health plans or other types of arrangements in which they were receiving a fixed amount of money to care for a group of patients. Getting patients into housing could lower their costs and increase their operating margins. Others, particularly religiously affiliated and children’s hospitals, sought housing solutions as part of their charitable mission.

Reynolds said the trend is due in part to the Affordable Care Act, which requires hospitals to perform a community needs assessment to help guide their charitable efforts. That prompted more hospitals to consider the social needs of their patients and pushed housing concerns up the list. Additionally, the Internal Revenue Service clarified in 2015 that hospitals could claim housing investments as charitable spending required under their tax-free status. And provisions included in the 2017 tax cut bill provided significant tax savings for investors in newly designated opportunity zones, increasing their interest in affordable housing projects.

Some hospitals, she said, may use their cash reserves to invest in housing projects that generate a lower return than other investment options because it furthers their mission, not just their profits.

In other cases, hospital systems play a facilitator role—using their access to cheap credit or serving as an anchor tenant in a larger development—to help get a project off the ground.

“Housing is not their business,” Guerrero said. “It’s not an easy space to get into if you don’t have the experience, if you don’t have a real estate development team in-house to understand how to put these deals together.”

CUTTING COSTS

In the southwestern corner of Colorado, Centura Health’s Mercy Regional Medical Center has partnered with Housing Solutions for the Southwest to prioritize housing vouchers for frequent users of the emergency room.

Under a program funded by the Catholic Health Initiatives, Mercy hired a social worker and a case manager to review records of frequent emergency room patients. They quickly realized how big an issue housing was for those patients. Many had diabetes and depended on insulin—which needs refrigeration. Kidney failure was one of the most costly diagnoses for the hospital.

Once patients received housing vouchers and found stable housing, though, costs began to drop.

“We now knew where they were. We knew that they had a safe place to live,” said Elsa Inman, program coordinator at Mercy Regional. “We knew they would be more effective in managing their chronic conditions.”

The patients with stable housing were more likely to make it to their primary care and specialist appointments, more likely to stay on top of medications and keep their chronic conditions in check.

The combination of intensive case management and patient engagement helped to halve ER visits for the first 146 patients in the program, saving nearly $495,000 in Medicaid spending in less than three years.

“Hospitals are businesses and nonprofits are businesses,” said Brigid Korce, program development director for Housing Solutions. “They are bottom-line, dollars-and-cents people.”

Inman acknowledged that the hospital might have missed out on some revenue by reducing ER use by these patients. Hospitals are still largely paid by the number of patients they treat and the number of services they provide.

But most of those patients were covered by Medicaid, so reimbursements were low anyway. And the move freed up more ER beds for patients with more critical needs.

“We want to be prepared for life-threatening conditions,” Inman said. “If you’ve got most of your beds taken up by someone who can be receiving patient care outside in the community, then that’s the right thing to do.”

That was less of an issue for the inpatients at Denver Health. Because hospitals are generally paid a fixed amount for a given diagnosis, the longer a patient stays in the hospital, the more money the hospital loses.

“They’ve basically exhausted their benefit under any plan because they don’t meet medical necessity anymore,” Burnette said. “If they had a home, they would go home. But they don’t, so they stay in the hospital.”

 

 

 

Coalition of 181 CEOs say society should matter alongside profit

Chief executives who are members of the Business Roundtable, include, left to right, front row: Julie Sweet of Accenture North America, Brian Moynihan of Bank of America, Tim Cook of Apple, Robert F. Smith of Vista Equity Partners of Austin. Back row: Jeff Bezos of Amazon, Mary Barra of General Motors and Larry Fink of BlackRock.

Nearly 200 chief executives, including the leaders of Apple, Pepsi and Walmart, tried on Monday to redefine the role of business in society — and how companies are perceived by an increasingly skeptical public.

Breaking with decades of long-held corporate orthodoxy, the Business Roundtable issued a statement on “the purpose of a corporation,” arguing that companies should no longer advance only the interests of shareholders. Instead, the group said, they must also invest in their employees, protect the environment and deal fairly and ethically with their suppliers.

“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,” the group, a lobbying organization that represents many of America’s largest companies, said in a statement. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

The shift comes at a moment of increasing distress in corporate America, as big companies face mounting global discontent over income inequality, harmful products and poor working conditions.

On the Democratic presidential campaign trail, Senators Bernie Sanders and Elizabeth Warren have been vocal about the role of big business in perpetuating problems with economic mobility and climate change. Lawmakers are looking into the dominance of technology companies like Amazon and Facebook.

There was no mention at the Roundtable of curbing executive compensation, a lightning-rod topic when the highest-paid 100 chief executives make 254 times the salary of an employee receiving the median pay at their company. And hardly a week goes by without a major company getting drawn into a contentious political debate. As consumers and employees hold companies to higher ethical standards, big brands increasingly have to defend their positions on worker pay, guns, immigration, President Trump and more.

“They’re responding to something in the zeitgeist,” said Nancy Koehn, a historian at Harvard Business School. “They perceive that business as usual is no longer acceptable. It’s an open question whether any of these companies will change the way they do business.”

The Business Roundtable did not provide specifics on how it would carry out its newly stated ideals, offering more of a mission statement than a plan of action. But the companies pledged to compensate employees fairly and provide “important benefits,” as well as training and education. They also vowed to “protect the environment by embracing sustainable practices across our businesses” and “foster diversity and inclusion, dignity and respect.”

It was an explicit rebuke of the notion that the role of the corporation is to maximize profits at all costs — the philosophy that has held sway on Wall Street and in the boardroom for 50 years. Milton Friedman, the University of Chicago economist who is the doctrine’s most revered figure, famously wrote in The New York Times in 1970 that “the social responsibility of business is to increase its profits.”

This mind-set informed the corporate raiders of the 1980s and contributed to an unswerving focus on quarterly earnings reports. It found its way into pop culture, when in the 1987 movie “Wall Street,” Gordon Gekko declared, “Greed is good.” More recently, it inspired a new generation of activist investors who pushed companies to slash jobs as a way to enrich themselves.

“The ideology of shareholder primacy has contributed to the economic inequality we see today in America,” Darren Walker, the president of the Ford Foundation and a Pepsi board member, said in an interview. “The Chicago school of economics is so embedded in the psyche of investors and legal theory and the C.E.O. mind-set. Overcoming that won’t be easy.”

The Business Roundtable included its own articulation of the theory in an official doctrine in 1997, writing that “the paramount duty of management and of boards of directors is to the corporation’s stockholders.” Each version of its principles published over the last 20 years has stated that corporations exist principally to serve their shareholders.

But by last year, the Business Roundtable’s language was out of step with the times. Many chief executives, including BlackRock’s Larry Fink, had begun calling on companies to be more responsible. Businesses were pledging to fight climate change, reduce income inequality and improve public health. And at gatherings like the World Economic Forum in Davos, Switzerland, the discussions often centered on how businesses could help solve thorny global problems.

“The threshold has moved substantially for what people expect from a company,” Klaus Schwab, the chairman of the World Economic Forum, said in an interview. “It’s more than just producing profits for the shareholders.”

Last year, Jamie Dimon, the chief executive of JPMorgan Chase and the chairman of the Business Roundtable, began an effort to update its principles. “We looked at this thing that was written in 1997 and we didn’t agree with it,” Mr. Dimon said in an interview. “It didn’t fairly describe what we think our jobs are.”

Mr. Dimon proposed making a formal revision to the annual statement at a Business Roundtable board meeting in Washington this spring. It then fell to Alex Gorsky, the chief executive of Johnson & Johnson, who runs the group’s governance committee, to create the language.

“There were times when I felt like Thomas Jefferson,” Mr. Gorsky said in an interview.

While the group cast the change in language as an embrace of new corporate ideals, it was also a tacit acknowledgment of the heightened pressures facing companies across the country — including many that signed the document.

In 2017, after the president’s initially tepid response to the violent white supremacist protests in Charlottesville, Va., the chief executives of several major companies disbanded White House business advisory groups in protest. Walmart, the nation’s largest gun seller, is under pressure after a series of mass shootings, including the recent massacre at its store in El Paso. Amazon, the giant online retailer, is facing scrutiny from lawmakers who say it avoids paying taxes and uses its dominance to hurt competitors.

And protesters have mobilized across the country to call for a higher minimum wage.

For companies to truly make good on their lofty promises, they will need Wall Street to embrace their idealism, too. Until investors start measuring companies by their social impact instead of their quarterly returns, systemic change may prove elusive.

Nowhere has the new scrutiny on corporations been more pronounced than on the presidential campaign trail. On Monday, Mr. Sanders said in an interview that the Business Roundtable was “feeling the pressure from working families all over the country.”

“I don’t believe what they’re saying for a moment,” he said. “If they were sincere, they would talk about raising the minimum wage in this country to a living wage, the need for the rich and powerful to pay their fair share of taxes.”

In a statement Monday, Ms. Warren called the announcement “a welcome change” but cautioned that “without real action, it’s meaningless.

“These big corporations can start following through on their words by paying workers more instead of spending billions on buybacks,” she said.

While the new statement of purpose represents a sizable shift from the group’s longstanding principles, it was not the first time Business Roundtable had taken a position on a social issue. Last August, the group denounced President Trump’s immigration policies, describing family separations as “cruel and contrary to American values.”

Monday’s statement represented an even broader shift, signaling companies’ willingness to engage on issues of pay, diversity and environmental protection. Several of the executives who signed the letter said the group would soon offer more detailed proposals on how corporations can live up to the ideals it outlined, rather than focusing purely on economic policies.

“It’s a real divergence considering everything we’ve done in the past has been around policy,” said Chuck Robbins, the chief executive of Cisco, who is on the group’s board, adding, “This is just the first piece.”

The executives quickly pointed out that they had not forgotten about investors.

“You can provide great returns for your shareholders and great benefits for your employees and run your business in a responsible way,” said Brian Moynihan, the chief executive of Bank of America.

But the statement’s lack of specific proposals also drew skepticism.

“If the Business Roundtable is serious, it should tomorrow throw its weight behind legislative proposals that would put the teeth of the law into these boardroom platitudes,” said Anand Giridharadas, the author of “Winners Take All: The Elite Charade of Changing the World.” “Corporate magnanimity and voluntary virtue are not going to solve these problems.”

 

 

 

Charity Care Spending By Hospitals Plunges

Charity Care Spending By Hospitals Plunges

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California hospitals are providing significantly less free and discounted care to low-income patients since the Affordable Care Act took effect.

As a proportion of their operating expenses, the state’s general acute-care hospitals spent less than half on these patients in 2017 than they did in 2013, according to data the hospitals reported to California’s Office of Statewide Health Planning and Development.

The biggest decline in charity care spending occurred from 2013 to 2015, when it dropped from just over 2% to just under 1%. The spending has continued to decline, though less dramatically, since then.

The decline was true of for-profit hospitals, so-called nonprofit hospitals and those designated as city, county, district or state hospitals.

Health experts attribute the drop in charity care spending largely to the implementation of the federal Affordable Care Act, popularly known as Obamacare. The law expanded insurance coverage to millions of Californians, starting in 2014, and hospitals are now treating far fewer uninsured patients who cannot pay for the care they receive.

With fewer uninsured patients, fewer patients seek financial assistance through the charity care programs, according to the California Hospital Association.

Cori Racela, deputy director at the Western Center on Law & Poverty, countered that many people still need financial assistance because — even with insurance — they struggle to pay their premiums, copays and deductibles.

“The need for charity care has changed,” she said, “but it still exists.”

The data on charity care comes from most of the state’s general acute-care hospitals but does not include Kaiser Permanente hospitals, which are not required by the state to report their charity care totals. (Kaiser Health News, which produces California Healthline, has no affiliation with Kaiser Permanente.)

For 2017, California Healthline used data from 177 nonprofit hospitals, 80 for-profit hospitals and 54 city, county, district or state hospitals. The breakdown was similar for the other years, with slight fluctuations.

Nonprofit hospitals, whose charity care spending dropped from 2.02% of operating expenses to 0.91% over the five-year period, are required by state and federal law to provide “community benefits” in exchange for their tax-exempt status.

They can meet that requirement beyond providing free and discounted care in a variety of ways: They can offer community public health programs, write off uncollected patient debt and claim the difference between what it costs to provide care and the amount that they are reimbursed by government insurance programs.

Nonprofit “hospitals get tax-exempt status, but they don’t get it for free,” said Ge Bai, associate professor of accounting and health policy at Johns Hopkins University. Charity care “is part of the implicit contract between hospital and taxpayers.”

Bai sees the reduced spending on charity care as part of a trend of nonprofit hospitals acting more like their for-profit counterparts.

Many nonprofit hospitals “no longer consider charity care their primary mission,” she said. “They are making more and more money but they are dropping their charity care.”

The state and federal governments set no minimum requirements for charity spending by hospitals, although the California Attorney General has created standards for a few nonprofit hospitals that have changed ownership in recent years.

Jan Emerson-Shea, a spokeswoman for the California Hospital Association, said hospitals are giving back to their communities in ways beyond charity care.

“You see charity care declining, but Medi-Cal losses are increasing,” Emerson-Shea said. She pointed to the growing shortfalls many hospitals report from caring for more patients covered by the public insurance program. “Every Medi-Cal patient we treat we lose money on.”

Medi-Cal, the state’s Medicaid program for low-income residents, increased its rolls by 5.6 million — or about 70% — from 2013 to 2017.

Racela, of the Western Center on Law & Poverty, would like to see changes in California’s charity care rules to address high out-of-pocket costs.

And she wants hospitals to abide by the state law that requires them to inform patients that they may be eligible for charity care based on their income.

“There is still a big unmet need for charity care across the state,” Racela said.

 

 

 

Grassley Renews Probe of Nonprofit Hospitals

https://www.healthleadersmedia.com/grassley-renews-probe-nonprofit-hospitals

The Iowa Republican has asked the IRS for data on how many of the nation’s approximately 3,000 tax-exempt hospitals are in compliance with charity care requirements.


KEY TAKEAWAYS

Grassley asked for information about whether tax-exempt hospitals are meeting the statutory requirements laid out in section 501 of the Internal Revenue Code.

The lawmaker is renewing his probe of tax-exempt hospitals after hearing reports that ‘at least some of these tax-exempt hospitals have cut charity care, despite increased revenue.’

Senate Finance Committee Chairman Chuck Grassley has renewed efforts to ensure that nonprofit hospitals are earning their tax-exempt status by providing enough services for low-income people.

In a letter to Internal Revenue Service Commissioner Charles Rettig, the Iowa Republican asked for data on how many hospitals are in compliance with the requirements for tax-exempt status and the status of IRS examinations of those not in compliance.

“Making sure that tax-exempt hospitals abide by their community benefit standards is a very important issue for me,” Grassley said in his letter.

“As chairman of the Senate Judiciary Committee, I oversaw an investigation into the billing practices of the Mosaic Life Care hospital. That investigation resulted in debt relief of almost $17 million for thousands of low-income patients.  This issue is still just as important to me now that I am chairman of the Senate Finance Committee,” Grassley wrote.


The Mosaic Life inquiry examined the billing and debt collection practices at the health system after news reports indicated it had sued low-income patients who should have qualified for charity care.

Grassley told Rettig that he was renewing his probe of tax-exempt hospitals after hearing “reports” that “at least some of these tax-exempt hospitals have cut charity care, despite increased revenue, calling into question their compliance with the standards set by Congress.”

He asked Rettig for information about whether tax-exempt hospitals are meeting the statutory requirements laid out in section 501 of the Internal Revenue Code, and he cited in his letter an article in Politico that suggested nonprofit hospitals were profiting from the Affordable Care Act while simultaneously cutting their charity care.

In February 2018, Grassley sent a letter to the IRS to inquire about how the agency reviews nonprofit hospital compliance.

Acting Commissioner David J. Kautter responded in April 2018 that the IRS reviews the status of about 1,000 U.S. tax-exempt hospitals each year by reviewing Forms 990, hospital websites, and other information in order to identify the hospitals with the highest likelihood of noncompliance.

Kautter said the IRS assigns either a compliance check or examination to those hospitals that appear to be most at risk of noncompliance.

Melinda Hatton, general counsel for the American Hospital Association, said her organization was confident that nonprofit hospitals are meeting their mission.

“In 2015, an AHA analysis of Schedule H filings reported that 13.3% of tax-exempt hospitals and health systems total expenses were devoted to community benefits programs, and that half of that spending was attributable to expenditures for providing financial assistance to needy patients and absorbing losses from Medicaid and other means-tested government program underpayments,” she said.

Hatton said an analysis by Ernst & Young for the AHA found that hospitals’ and health systems’ community benefit activities outweigh the value of their federal tax exemption by a factor of 11 to one. “According to the report, non-profit hospitals in 2013 were exempt from an estimated $6 billion in federal taxes and provided an estimated $67.4 billion in community benefits,” Hatton said.

“Making sure that tax-exempt hospitals abide by their community benefit standards is a very important issue for me.”