Hospitals give away millions in charity care
University of Colorado Health’s Northern Region, formerly Poudre Valley Health System, provided $118 million in charity care in 2012, while Banner Health’s two hospitals did $98.1 million combined.
UCHealth and Banner are both nonprofit health care organizations. Nonprofit hospitals pay no taxes, giving them an edge over for-profit rivals. In return, they are expected to offer a community benefit, including free and discounted care for low-income patients.
But as government budgets continue to tighten, federal officials increasingly have questioned hospital tax exemptions based on charity care levels.
There is no minimum dollar amount of charity care that hospitals must provide, and “community benefit activities” are vaguely defined. Still, the IRS in 2009 began to require hospitals to prove that they do, indeed, provide charity care, via a “Schedule H” with their annual Form 990 tax disclosures.
A 2011 study of 20 Form 990s from large health systems by ModernHealthcare.com showed that on
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