As tax-exempt hospitals face increased scrutiny of their charity care practices by Congress, the media, and consumer groups, they must help build a common ground for informed discussions about tax-exempt standards, according to preliminary research from PricewaterhouseCoopers Health Research Institute. The research findings underscore the need for tax-exempt hospitals to find solutions to more fairly and efficiently provide and report charity care and community benefit. The preliminary report describes how hospitals can establish common ground, their tax-exempt responsibility, and leading practices to address issues such as charity care measurement, provider pricing, and community benefit reporting. Final recommendations and best practice solutions will be published in the report My Brother’s Keeper in September.
Among the initial findings are that tax-exempt hospitals need to quantify the community benefits they provide by appointing a community benefits manager to supervise the reporting of a hospital’s community benefits programs; use a universally accepted model to issue the report; and conduct community needs assessment to identify needs of the population. For charity care reporting, the hospitals should focus on cost, not charges; clearly distinguish charity care from bad debt; simplify the charity care application process; and involve the board in setting charity-care policies. To satisfy demands for transparency, the hospitals should post charges or average price for common procedures; formulate rates for the uninsured based on managed care prices or Medicare rates; and establish a process to respond to patient requests for pricing. The preliminary report also makes recommendations on best practices for reporting executive compensation and joint ventures.
