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Facing the challenge to tax-exempt status

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Carmela Coyle, president and CEO of the Maryland Hospital Association, says that moves by municipal, county, state and federal governments to challenge the tax-exempt status of not-for-profit hospitals are a call to arms.

She notes  in a Hospital Impact piece that the Affordable Care Act imposed additional requirements that hospitals must meet to keep their tax-exempt status:

  • Conduct a community health needs assessment at least once every three years
  • Adopt a written financial assistance and emergency medical care policy conforming to statutory criteria
  • Do not charge patients eligible for financial assistance more than “amounts generally billed” to insured patients
  • Do not begin “extraordinary collection actions” before making “reasonable efforts” to determine if a patient is eligible for financial assistance

Ms. Coyle writes: “While the individual efforts of various states and the requirements in the ACA are more than enough for hospitals to address, there’s something bigger happening. These recent movements appear to be the culmination of a significant and worrisome erosion of the trusted relationships hospitals have enjoyed for so many decades with their communities.”

“There remain many battles to be fought over the tax-exempt nature of hospitals, but fixing the root of this issue won’t take place in a courtroom or legislative hearing room. It will take place in each of the communities that hospitals are privileged to serve. In 2006, the American Hospital Association (AHA) released the 28-page Trust Counts Now report, which called for hospitals to ‘reaffirm their rightful place as valued and vital community resources that merit broad public support.”’

“With hospitals’ very nature under assault due to increased governmental budget pressures, that call is as relevant now as it was a decade ago. A Web site from AHA, Community Connections, offers resources to help with that effort, but it is at the hospital level, where nurses, doctors, trustees and others, will need to begin to rebuild and reaffirm the relationships with their communities, so that hospitals once again are perceived not as a drain on county coffers, but as the invaluable resources they are.”


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