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AHA responds to NYT article on hospital tax-exemption

December 20, 2013

The AHA yesterday took strong issue with a Dec. 17 New York Times article that questioned whether tax-exempt hospitals are fulfilling their community mandate. The article, “Benefits Questioned in Tax Breaks for Nonprofit Hospitals,” did not provide a complete picture of the full range of community benefits provided by hospitals, the AHA said in a Dec. 18 letter to the editor. In rebutting the thrust of the article, the AHA cited a recent Ernst & Young report, based on Internal Revenue Services’ data collected from more than 900 hospitals. It showed tax-exempt hospitals “consistently provided benefits to the community valued at more than 11% of their total expenses,” the AHA observed. The benefits included, among other things, free care, financial assistance and spending to fill gaps in Medicaid underpayments. “This report clearly demonstrates that hospitals of every size, type and location are not only meeting, but are exceeding the IRS’ stringent community benefit standards,” AHA General Counsel Melinda Hatton wrote. The AHA letter noted that hospitals report community benefit based on costs rather than charges. Since 2000, hospitals provided more than $367 billion in uncompensated care to patients based on the actual cost of that care.