Tag Archives: Charity Care

Grassley Renews Probe of Nonprofit Hospitals

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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.”

 

 

 

Illinois hospital will have to meet constitutional charity standards, judge rules

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https://www.beckershospitalreview.com/finance/illinois-hospital-will-have-to-meet-constitutional-charity-standards-judge-rules.html?origin=cfoe&utm_source=cfoe

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An Illinois judge has ruled that the operator of Carle Foundation Hospital in Urbana must meet constitutional standards for charitable organizations in order to receive tax exemptions, The News-Gazette reports.

The Carle Foundation is seeking retroactive property tax exemptions for 2004-2011 and a refund for taxes it paid to local authorities during that time. However, Champaign County Judge Randy Rosenbaum agreed with the recent Illinois Supreme Court ruling that hospitals seeking tax exemptions must not only offer as much charity care as they would have paid in taxes; they also must extend charity care to an indefinite number of people and not create any barriers to it.

Hospitals looking for a tax exemption  also must show they do not have any capital, stock or shareholders. Carle Foundation attorneys  have argued that they need only show that the hospital complies with the terms of the hospital tax-exemption law.

John Colombo, a retired law professor at the University of at Illinois Urbana-Champaign, said that the ruling is important for the Carle Foundation’s upcoming trial, but does not clearly define charitable use for the future of Illinois hospitals.

“The Illinois Supreme Court is going to have to say at some point, ‘Here’s what it takes for an Illinois hospital to be tax-exempt,'” said Mr. Colombo.

 

 

Patient’s $7,800 ED bill reaches California Supreme Court

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https://www.beckershospitalreview.com/finance/patient-s-7-800-ed-bill-reaches-california-supreme-court.html

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A case involving a hospital patient’s emergency department bill has been initiated at the California Supreme Court, a spokesperson for the Judicial Council of California confirmed to Becker’s.

He said the supreme court received a petition for review from the patient, and it has at least 60 days to decide whether it will grant, deny or take other action.

The petition centers on an unpublished opinion by the Fifth District Court of Appeal issued in July that would allow self-pay patients treated at Community Regional Medical Center in Fresno, Calif., and Clovis (Calif.) Community Medical Center to challenge their medical expenses as part of a class action, The Fresno Bee reported.

The appeals court decision reversed a trial court order denying class certification; directed certification of an “issue class”; and denied the the patient’s request to publish the opinion. But now the patient has petitioned the supreme court to get the opinion published. “Unpublished or ‘noncitable’ opinions are opinions that are not certified for publication in official reports and generally may not be cited or relied on by other courts or parties in other actions,” the spokesperson for the Judicial Council of California said. However, if the case were published, it would become case law, potentially affecting lawsuits against hospitals statewide.

Hospital officials have argued the case should not be published.

The case goes back to a dispute over interpretation of Community Regional Medical Center’s admissions contract and the rates charged to an uninsured emergency room patient, Cesar Solorio, according to the appeals court decision. Mr. Solorio reportedly received X-rays and a splint on his wrist at the hospital on Sept. 22, 2015. He later received a bill for $7,812.03 and filed a class-action complaint alleging rates billed to self-pay patients are “inflated and exorbitant,” the appeals court decision states.

Community Medical Centers, the operator of Community Regional Medical Center and Clovis Community Medical Center, disputes claims that the self-pay billing process is different from insured patients, according to The Fresno Bee.

Michelle Von Tersch, vice president of communications and public affairs, told the publication documents regarding a patient’s treatment are reviewed to determine applicable charges after discharge. She said that many uninsured patients are eligible for financial aid programs, such as charity care.

Read the full Fresno Bee report here.

 

Governor says hospital tax could cover Medicaid expansion

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https://www.charlotteobserver.com/news/article214337194.html

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Maine’s Republican governor is publicly laying out a proposed tax hike on hospitals to pay for voter-approved Medicaid expansion.

Gov. Paul LePage’s office says Medicaid expansion will offset a tax hike by decreasing charity care and bad debt. Maine’s hospital tax rate is 2.23 percent, and Rabinowitz said Maine could go up to six percent.

Maine Hospital Association lobbyist Jeffrey Austin previously told The Associated Press that Maine hospitals pay $100 million in annual taxes and would oppose an increase.

Mainers voted last fall to expand Medicaid to 80,000 low-income adults.

LePage’s administration is fighting litigation by advocates calling on the governor to stop blocking expansion. LePage vetoed legislation funding Maine’s share of expansion with surplus and tobacco settlement funds after he argued lawmakers must fund expansion without raising taxes.

 

 

CMS finalizes 340B drug program cut

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https://www.healthcaredive.com/news/cms-finalizes-340b-drug-program-cut/509892/

Dive Brief:

  • The CMS on Wednesday released a final rule that will significantly cut drug payments to hospitals that use the 340B Drug Pricing Program. The changes to the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Program take effect Jan. 1, 2018.
  • The rule also puts a moratorium on enforcement of the direct supervision policy in certain cases, increases outpatient payments by 1.35%, removes six measures from the Outcome Reporting Program and removes total knee arthroplasty from the inpatient only list.
  • The American Hospital Association released a statement blasting the 340B cut, saying it “will dramatically threaten access to healthcare for many patients, including uninsured and other vulnerable populations.” AHA, America’s Essential Hospitals and the Association of American Medical Colleges plan to sue the administration over the change.

Dive Insight:

The cut to drug payments in the 340B program, which is mostly used by safety net hospitals, is dramatic. Instead of being paid the average sales price plus 6%, they will now be paid 22.5% less than the average price. Children’s hospitals and community hospitals in rural areas are exempt from the reduction.

Hospitals that use the program say it is necessary to helping them care for vulnerable populations, and have cautioned the cut will jeopardize that. There is little oversight, however, over how hospitals track and use the savings generating through 340B. Some lawmakers have said hospitals should be required to make this information readily available.

A controversial study released last month showed hospitals participating in 340B had more of a decline in charity care than other hospitals. AHA said the report is misleading and doesn’t take into account other community benefits hospitals provide.

Hospitals will also be angered by the CMS decision to allow total knee replacement surgeries to take place in outpatient settings. The agency is following the lead of commercial payers, who are pushing for care to move away from more expensive inpatient settings. CMS has said the change will let Medicare beneficiaries get a knee replacement at lower cost, but hospitals say the quality of care for those procedures could decrease.

 

How hospitals got richer off Obamacare

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http://www.politico.com/interactives/2017/obamacare-non-profit-hospital-taxes/

After fending off challenges to their tax-exempt status, the biggest hospitals boosted revenue while cutting charity care.

decade after the nation’s top hospitals used all their advertising and lobbying clout to keep their tax-exempt status, pointing to their vast givebacks to their communities, they have seen their revenue soar while cutting back on the very givebacks they were touting, according to a POLITICO analysis.

Hospitals’ behavior in the years since the Affordable Care Act provided them with more than 20 million more paying customers offers a window into the debate over winners and losers surrounding this year’s efforts to replace the ACA. It also puts a sharper focus on the role played by the nation’s teaching hospitals – storied international institutions that have grown and flowered under the ACA, while sometimes neglecting the needy neighborhoods that surround them.

And it reveals, for the first time, the extent of the hospitals’ behind-the-scenes efforts to maintain tax breaks that provide them with billions of dollars in extra income, while costing their communities hundreds of millions of dollars in local taxes.

One example of the hospitals’ efforts to remain tax-free: the soaring, minutelong TV commercial that popped up on stations across Western Pennsylvania in 2009 by the University of Pittsburgh Medical Center, the area’s flagship hospital and one of the largest teaching hospitals in the country.

“UPMC is proud to be part of our city’s past, present and, more importantly, its future,” the narrator enthuses, as the camera pans around Pittsburgh scenes of priests, grocery-store workers, even a ballet dancer before coming to rest on the sprawling medical campus — one of the five largest in the world.

At the time, Congress was considering not only whether to remove tax-exempt status for teaching hospitals, a cause of Sen. Chuck Grassley (R-Iowa), but also whether to add requirements forcing hospitals to do more for the low-income, urban communities in which so many of the top hospitals are located. And local leaders in many states were attempting to claw back billions of dollars in forgone tax revenue — a battle that would soon break out between UPMC and the mayor of Pittsburgh, too.

But the hospitals, aided by their good-neighbor initiative, prevailed. The ACA did nothing more to force the hospitals to share their revenue with their neighbors or taxpayers generally.

The result, POLITICO’s investigation shows, is that the nation’s top seven hospitals as ranked by U.S. News & World Report collected more than $33.9 billion in total operating revenue in 2015, the last year for which data was available, up from $29.4 billion in 2013, before the ACA took full effect, according to their own financial statements and state reports. But their spending on direct charity care — the free treatment for low-income patients — dwindled from $414 million in 2013 to $272 million in 2015.

To put that another way: The top seven hospitals’ combined revenue went up by $4.5 billion per year after the ACA’s coverage expansions kicked in, a 15 percent jump in two years. Meanwhile, their charity care — already less than 2 percent of revenue — fell by almost $150 million per year, a 35 percent plunge over the same period.

Revenue up, charity care down

While operating revenue increased under Obamacare for not-for-profit hospitals like the Cleveland Clinic and UCLA Medical Center, the amount of charity health care they provided fell. For example, while UCLA saw operating revenue grow by more than $300 million between 2013 and 2015, charity care fell from almost $20 million to about $5 million.

Paul Ryan is determined to gut Medicare. This time he might succeed

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http://www.latimes.com/business/hiltzik/la-fi-hiltzik-medicare-ryan-20161114-story.html?utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_source=hs_email&utm_medium=email&utm_content=37625118&_hsenc=p2ANqtz-8op3UbE6wkf1QHSbmlOITUvS45OW4rFAoMDUSaFiNXpSZN2Afucl6wLeww-aou9CIZqsrb3AUTqQwZmAAU0vubnznweA&_hsmi=37625118

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Bursting with the policymaking power that control of both houses of Congress and the White House gives Republicans, House Speaker Paul D. Ryan (R-Wis.) has lost no time in teeing up a favorite goal: gutting Medicare.

In an interview with Fox News Channel last Thursday, Ryan said: “Obamacare rewrote Medicare … so if you’re going to repeal and replace Obamacare, you have to address those issues as well. … What people don’t realize is that Medicare is going broke, that Medicare is going to have price controls. … So you have to deal with those issues if you’re going to repeal and replace Obamacare. Medicare has got some serious problems because of Obamacare. Those things are part of our plan to replace Obamacare.”

There’s no secret about what specifically Ryan has in mind. He intends to replace traditional Medicare, an efficient program offering guaranteed treatment and featuring rock-bottom administrative costs, with a privatized program. Seniors would get a federal voucher to help them pay premiums charged by commercial insurance plans. Ryan calls this system “premium support.”

The 1 thing about healthcare that needs to change: 4 executives weigh in

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http://www.beckershospitalreview.com/hospital-management-administration/the-1-thing-about-healthcare-that-needs-to-change-4-executives-weigh-in.html

Self-Discovery

From the shift to value-based care to increased price transparency, the healthcare industry is in the midst of significant changes that are aimed at efficiently improving care. However, for that goal to be achieved, problems in the industry such as disparity in access to care and confusing billing systems still need to be addressed, according to healthcare executives.

In a panel discussion on Nov. 9 at the Becker’s 5th Annual CEO + CFO Roundtable in Chicago moderated by Rhoda Weiss, PhD, nationally recognized consultant, speaker, and author, four great minds in healthcare discussed the changes they would like to see in the industry, what gives them pride in their organizations and the issues that keep them awake at night.

Christie boasts N.J. Medicaid expansion success under Obamacare

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http://www.nj.com/politics/index.ssf/2016/08/christie_medicaid_expansion_report.html

Gov. Chris Christie on Monday boasted the success of expanding the Medicaid program in the state, arguing the “naysayers” have been “proven wrong” and that 566,000 additional New Jerseyans have insurance coverage.

It’s been three years since Christie announced he planned to buck his party and embrace President Obama’s Medicaid expansion under the Affordable Care Act. He was one of only a handful of GOP governors to embrace the changes.

“There were many naysayers,” Christie said during a Statehouse news conference.

“We made a deal with the federal government. If they keep their deal, we’ll keep our part of the deal,” he said. “I am for Medicaid expansion … but I am not for Medicaid expansion at any price.”

Hospitals show some benefit from ACA

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http://www.post-gazette.com/news/health/2016/07/24/Hospitals-show-some-benefit-from-ACA/stories/201605090123

The Affordable Care Act has cut hospital charity care and bad debt expenses, but opponents say it is not enough to contain healthcare costs.