Finance Committee Head Calling for Charity Care Standards
Republican Senator Chuck Grassley of Iowa is following up on the issue of whether nonprofit hospitals deserve their tax-exempt status on the grounds of the charity care they provide. He released the answers he received from ten major non-profits whom he had queried in May last year. The questions focused on how these facilities define charity care and whether they have joint ventures with for-profit health providers. In a letter (pdf) dated Sept. 12, 2006, the Senator explains he finds the answers (PDF) show widely different ways to define charity care and community benefit. Grassley likes the guidance established by the Catholic Health Association (CHA) because it’s a move towards common definititions and measurement standards. This document, dubbed A Guide for Planning and Reporting Community Benefit is based on six beliefs:
- “Those who live in poverty and at the margins of our society have a moral priority for services.
- Not-for-profit mission-driven health care organizations have a responsibility to work toward improved health in the communities they serve.
- Community members and organizations must become actively involved in the health care facility’s community benefit programs.
- Health care organizations must demonstrate the value of their community services.
- Community benefit programs must be integrated throughout health care organizations.
- Leadership commitment is required for successful community benefit programs.”
Sr. Carol Keehan, CHA’s president and chief executive officer, testified before the Finance Committee on Sept. 13. Grassley advised the IRS to look at the CHA guidelines as they expand Form 990 to ask additional information from non-profit hospitals. The committee also released two letters (PDFs) from the Federation of American Hospitals (FAH) that shows how some for-profit providers sometimes provide as much if not more charity than tax-exempt ones.
September 15, 2006 Related topics: Legal & legislative, Finance