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AHA uses report to defend not-for-profit hospitals’ tax exemption

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Citing  a report based on four-year-old data, the American Hospital Association (AHA) asserts that community benefits outweigh the value of nonprofit hospitals’ tax exemption by a factor of 11 to one. The analysis, performed by Ernst and Young at AHA’s request, used 2013 data from tax forms, community- benefit reports and Medicare cost reports from nearly 3,000 non-profit general hospitals.

The report said that more than half the benefits involved financial assistance to patients as well as the hospitals’ eating of unreimbursed Medicaid and other expenses.

Healthcare Dive commented: “Hospitals have to take a number of steps to support their tax-exempt status. Most facilities don’t have trouble meeting these requirements, but last month the IRS — for the first time — revoked a tax exemption for an unnamed  hospital. Gary Young, director of Northeastern University’s Center for Health Policy and Healthcare Research, told Healthcare Dive that was an extreme case, but could signal a step up in enforcement. ‘It may certainly send some chills down the spines of some hospital managers,’ he said.

“Non-profit hospitals have faced questions about high executive salaries and occasionally significant revenue. The AHA report could ease some of those concerns.’’

To read the report prepared for the AHA, please hit this link.

To read the Healthcare Dive commentary, please hit this link.


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