Evaluation of nonprofits’ charity care continues

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

If you’re keeping a list of issues that have been rejuvenated through inclusion in the Baucus bill, you can safely add Iowa Sen. Chuck Grassley’s crusade to keep nonprofit hospitals accountable for the provision of adequate amounts of charity care. According to the Chicago Tribune‘s Bruce Japsen, the proposed bill includes Grassley’s provision to “improve the community service, transparency and billing practices of nonprofit hospitals.”

From Japsen’s story:

“For now, there’s no minimum percentage requirement for charity care and community benefit,” Grassley said in a statement on Baucus’ proposal. But Grassley is not ruling out a required level in the future, saying it needs “more study.”

“I agree with groups that take their charitable mission seriously … that a percentage payout requirement would become a ceiling, not a floor, like the private foundation payout of generally five percent,” Grassley said in a memo Thursday. “Instead, we need a formula that would maximize expenditures for charitable purposes.”

The Washington Post‘s Kathleen Day, meanwhile, reported on the results of a Grassley-backed Senate investigation into the charity care provided by nonprofit hospitals:

The investigators found that while federal law requires charity care in exchange for tax-exempt status, a 37-year-old IRS rule implementing the law is so vague that nonprofit hospitals have been able to exploit it by offering some free services but often little aid to the poorest people in their communities.

Nonprofits frequently charged higher prices to poorer people with no health insurance than they did to better-off patients who had coverage, researchers found. At the same time, many of the hospitals’ top executives enjoyed generous perks such as paid country club memberships and stays at expensive hotels.

1 thought on “Evaluation of nonprofits’ charity care continues

  1. Pingback: Tax documents show CEO pay exceeds charity care at some Calif. nonprofit hospitals : Covering Health

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