For more than 20 years, California’s not-for-profit hospitals have led the nation in ensuring that vulnerable populations have access to much needed health care services and health improvement programs. In 1994, not-for-profit hospitals’ missions were affirmed by a state law that constructed the framework for conducting a community health needs assessment and developing a community benefit plan. This framework served as a national model for similar provisions in the Affordable Care Act, enacted in 2010. Today, not-for-profit hospitals continue their tradition of commitment by investing an estimated $12 billion annually in their communities.
California’s not-for-profit hospitals are committed to improving the health and well-being of the communities they serve. This valuable work is inherent in not-for-profit hospitals’ mission and symbolizes a commitment to helping create healthy communities outside of the hospital walls — especially in high-need and vulnerable communities. Not-for-profit hospitals invest all resources in health care services or into their communities.
Tax-Exempt Status of Not-for-Profit Hospitals
The tax-exempt status of not-for-profit hospitals is continuously being reviewed by policymakers, regulators and public interest groups. Over the years, various proposals have been introduced that would impose burdensome and inflexible standards on not-for-profit hospitals. CHA supports the development of appropriate guidelines that are not unduly burdensome and that allow sufficient flexibility to ensure not-for-profit hospitals are able to carry out their mission. Guidelines must be based on broad measures of community benefit without establishing rigid formulaic thresholds.
Senate Finance Committee Chairman Orrin Hatch (R-UT) and committee member Chuck Grassley (R-IA) sent a letter to the acting Internal Revenue Services (IRS) Commissioner asking the agency about its oversight of not-for-profit hospitals.
In the letter, the senators question how the IRS reviews charitable giving information submitted by hospitals. The senators also inquire about the IRS’ guidance to hospitals related to the obligation to provide community benefits as a part of a hospital’s tax-exempt status.
Applications are now open for the American Hospital Association’s Foster G. McGaw Prize, which honors health care organizations that have demonstrated exceptional commitment to community service. Applicants should showcase strong leadership within their community, a commitment to service and care, partnerships that help meet community needs, a breadth and depth of community service initiatives, and a high level of community involvement. The winner will receive a $100,000 prize, and the top three finalists will receive $10,000 each. For more information, visit www.aha.org/foster.