On Wednesday, the newly formed Senate Select Committee on Charity Care and Non-Profit Hospitals will hold its first hearing, increasing scrutiny over whether California's not-for-profit hospitals provide enough community benefits to justify their tax-exempt status, the Los Angeles Times' "Money & Co." reports (Terhune, "Money & Co.," Los Angeles Times, 8/14).
Not-for-profit hospitals are required by law to report annually to state officials on their plans to provide community benefits, such as no-cost or reduced-cost health care for low income individuals, known as charity care.
However, the facilities are not required to provide a specific set of community benefits.
In addition, the Office of Statewide Health Planning and Development does not have the authority to fine hospitals that do not submit community benefit plans.
Details of Recent Audit
A recent audit of not-for-profit hospitals found that 15 did not submit community benefit plans in 2010.
In addition, the audit found that the amount of charity care provided by hospitals varied based on the populations they serve and their policies for determining eligiblity for such care.
The auditors said that "a [not-for-profit] hospital that a serves a low-income community might provide more charity care than other hospitals serving more affluent areas, even though both hospitals share the same charity care policies" (Mieszkowski, Bay Citizen, 8/15).
Calls for Increased Scrutiny
Sen. Ellen Corbett (D-San Leandro), chair of the new committee, in a statement said, "Communities across California are served by [not-for-profit] hospitals, and we need to make sure they are honoring their commitment to serve the public that comes with their special tax-exempt status" ("Money & Co.," Los Angeles Times, 8/14).
Meanwhile, the California Nurses Association plans to hold a rally at the state Capitol following the committee's first hearing.
Zenei Cortez, a registered nurse who is co-president of CNA, in a statement said that the rally will focus on the "huge subsidies" that not-for-profit hospitals receive "through a broad array of public services." Cortez said that the public has "a right to expect the hospitals (to) fulfill their social obligation to provide appropriate levels of charity care and other community benefits in return."
The California Hospital Association argued that setting a specific amount of charity care that all not-for-profit hospitals must provide could limit how the facilities serve communities.
Anne McLeod -- senior vice president of health policy for CHA -- said, "I think that it's very important for hospitals to have the flexibility to meet the unique needs of the communities that they serve."
According to CHA, the majority of the state's roughly 430 hospitals are not-for-profit (Bay Citizen, 8/15).