Nonprofit Hospitals Face Scrutiny

Nine of the 12 hospitals in South Florida that are faring the best financially are nonprofit hospitals, and they expect to face scrutiny as the Internal Revenue Service begins to ask just what such organizations do to receive tax-exempt status, reports The Miami Herald.

Elsewhere in the country, such as Illinois and Pennsylvania, attention has also focused on the benefits nonprofit hospitals provide to the cities and towns where they are located.

Last month, Sen. Charles Grassley, Republican of Iowa, asked the IRS for information on nonprofit hospitals’ work to justify their tax-exempt status. The IRS plans to send out questionnaires to such hospitals on this topic.

A Government Accountability Office report found that in Florida, 5.5 percent of nonprofit hospitals’ operating expenses were donated to free care, while for-profit hospitals donated 4.3 percent.

Government-owned hospitals spend 12.9 percent of operating expenses on free care, the paper reports.