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Nonprofit hospitals need more oversight on charity care, AMA says
The American Medical Association says hospitals should face penalties for falling short.. Hospitals have rejected accusations that they aren’t providing enough charity care.
Hospitals have faced criticism that they should be doing more to help those in financial need, but now they are getting pressure from one of the biggest voices in healthcare.
Bruce A. Scott, MD, president of the AMA, says nonprofit hospitals need more oversight on charity care policies.
The American Medical Association says there should be more financial oversight of nonprofit hospitals and their charity care policies. The AMA approved a policy calling for more oversight and standardization in charity care policies of nonprofit hospitals at its meeting in Orlando earlier this week.
With that step, the AMA says it will press for extended government oversight at the federal and state levels. The AMA also says it will push government agencies to enact penalties for hospitals that are falling short, including the loss of tax-exempt status.
The AMA said that charity care policies can vary significantly across health systems, as different hospitals employ different standards to determine financial need.
Going further, the AMA says nonprofit hospitals are receiving billions of dollars in tax breaks and should be demonstrating that they are meeting those obligations. The AMA cited a critical report from the Lown Institute which suggests most nonprofit hospitals are getting more in tax breaks than they provide in benefits to the community.
Bruce Scott, MD, president of the AMA, said nonprofit hospitals should offer clearer charity care policies to help those struggling to pay for their care.
“Failing to standardize the financial assistance process across all nonprofit hospitals makes the benefit inaccessible to many eligible people. A patient may qualify for aid at one hospital, but not at a hospital across town,” Scott said in a statement. “Often the application process is not clear and requires patients to complete onerous paperwork requests, discouraging patients from completing financial aid applications. In some cases, patients are not screened for eligibility to ensure financial assistance reaches those in need.”
The American Hospital Association has rejected accusations that hospitals aren’t doing enough to help those in need. The association also says uniform policies to assess the charity care of nonprofit hospitals would miss the mark.
Aaron Wesolowski, vice president of research strategy and policy communications at the American Hospital Association, said the IRS recognizes that the financial aid programs of nonprofit hospitals represent only part of the benefits they provide to communities. They also point out that communities have unique needs and different mixes of commercial insurers and those on Medicare and Medicaid.
“Every community is different, and as such the benefits hospitals provide for their communities and how they deliver them will vary,” Wesolowski said in a statement. “A one-size-fits-all approach or overemphasis of a single component of community benefit ignores the important diversity in the ways hospitals across the country meet their communities’ needs.”
The Lown Institute released a report in March that said four out of five (80%) nonprofit hospitals give back less than they receive in tax breaks. They said many hospitals have “fair share deficits” of tens of millions of dollars, and that nationwide, the total topped $25 billion.
The hospital association has repeatedly criticized the Lown Institute’s reports, arguing that they don’t include some important community benefits from hospitals including medical research and training doctors and nurses.
The American Hospital Association has argued that nonprofit hospitals are meeting their obligations, and going beyond.
Health systems provided $10 in community benefits for every dollar in tax breaks they received in 2020, according to an analysis by EY. The hospital association commissioned that report, which was released in September.
Hospitals also point out that they provide other community services, including vaccination clinics, programs to help those struggling with food insecurity, transportation, education on maternal health, among others.
