Nonprofit Hospitals Object to Senate Proposal to Add New ‘Charity Care’ Requirements

The Association for Healthcare Philanthropy, which represents nearly 5,000 nonprofit hospitals, is objecting to a plan floated by two key Senators to establish a minimum level of free care that nonprofit hospitals would be required to provide to the poor.

The policy option was included in a discussion on ways to change the health-care system.

It would place new requirements on nonprofit hospitals and punish groups that fail to meet them. Organizations that flagrantly fail to provide the minimum level of care could lose their tax-exempt status. No specific minimum was specified in the document released by Sen. Max Baucus, Democrat of Montana, and Sen. Charles Grassley, Republican of Iowa.

In its objections to the proposal, the association said they were upset that hospitals could not count bad debts as part of their charity care. They said many nonprofit hospitals already provide a lot of uncompensated care because people don’t pay their bills.

The association said it preferred the broader “community standard” requirement that hospitals have been required to follow since 1969.

Under that standard, hospitals can provide a broader range of services to their cities and towns, such as promoting good health and offering preventive care.