Nonprofit hospitals are required to provide benefits to the communities they serve to keep a tax-exempt status. Nationwide, about 2,900 hospitals (60% of hospitals) are nonprofit and the financial benefit to these hospitals from being tax-exempt is estimated to be worth $12.6 billion annually.
Historically, much of hospitals’ community benefit activities have been charity care and other forms of uncompensated care. A lack of transparency and wide variations in how, and how much, hospitals spend for community benefits led to increased oversight by the Internal Revenue Service (IRS) and Congress. New community benefit requirements under the Affordable Care Act include community health needs assessments and improvement plans, as well as additional consumer protections on financial assistance, billing, and collections practices.
To help public health officials and policy-makers better understand the opportunity around the community benefit requirements for nonprofit hospitals, the Robert Wood Johnson Foundation funded The Hilltop Institute at University of Maryland, Baltimore County (UMBC)—a research center that focuses on the needs of vulnerable populations—to publish a series of issue briefs on best practices, new laws and regulations, and study findings related to community benefit activities and reporting.
The program provides tools to state and local health departments, hospital regulators, legislators, revenue collection and budgeting agencies, and hospitals, as these stakeholders develop approaches that will best suit their communities and work toward a more accessible, coordinated, and effective community health system.
NewPublicHealth caught up with Martha Somerville, JD, MPH, Hilltop’s Hospital Community Benefit Program Director, and Kevin Barnett, DrPH, MCP, Senior Investigator at the Public Health Institute, to discuss two new briefs on reporting requirements and community building, and what they add to the evolving field of hospital community benefit efforts to improve the health of communities.