Report Urges Greater Transparency for Not-for-Profit Hospitals
On Thursday, California's auditor released a report calling on the Legislature to adopt uniform guidelines for not-for-profit hospitals to follow when reporting charity care and community benefits, the Los Angeles Times reports.
Not-for-profit hospitals are legally required to submit an annual "community benefit plan" to the Office of Statewide Health Planning and Development. However, each hospital can determine which services qualify as a benefit and what value they warrant.
Services could include medical research, physician training and wellness promotion.
Noting the lack of uniform standards, the report found that not-for-profit hospitals and for-profit hospitals in California provided about the same amount of charity care from 2001 to 2005.
Sen. Chuck Grassley (R-Iowa) is pushing the Internal Revenue Service to implement new regulations that would require hospitals to provide more transparency about their charity care and community benefits.
Grassley said the report by California's auditor "highlights the problem with [not-for-profit] hospitals and their tax-exempt status: There aren't uniform standards for what's charity care and what isn't, so everyone's left to define it for themselves" (Engel, Los Angeles Times, 12/14).