Under 1959 law, hospitals claim right to bill county for charity care

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.

David Gulliver of Sarasota Health News found an almost-surreal local story that demonstrates just how desperate some recession-bitten hospitals have become. There are four major hospitals in the Sarasota area, three for-profit institutions and Memorial Hospital, which receives some subsidies and provides additional services. The three for-profit hospitals, citing an obscure 1959 law, have billed the country for $30.7 million in charity care since December of 2008.

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Sarasota Memorial Hospital, photo by srqpix via Flickr

The legislation in question, an amendment to the 1949 law establishing the Sarasota Hospital District (now Memorial Hospital), says that the county should reimburse any other hospitals in the county for charity care just as they do for Memorial. Nobody’s ever tried to take advantage of the provision before, and it may even be defunct. In fact, it’s sometimes difficult to tell just how seriously the parties are taking the whole mess. Fortunately, in Gulliver’s exhaustive chronicle of the dispute, he manages to tease apart the different threads of discord, unearth the real bones of contention and relate it to big-picture health economics, starting at the local level.

County officials say they have no intention of paying the bills, as the law was “superseded in the 1968 revision of the state constitution.” Furthermore, officials estimate that a $1 per $1,000 property tax increase would be required to cover the charity-care expenditures of the other three institutions, a tax officials say which would violate the state’s constitutional prohibition on raising taxes to subsidize for-profit industries.

For their part, hospitals say the bills are a means of drawing attention to the tax revenue funneled into Memorial — $47 million last year — and asking for a more “equitable distribution” of taxpayer money among area hospitals. In his story, Gulliver lays out this he-said, she-said, then digs into state laws, politics and more to show readers what’s really going on.

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