Setting the Record Straight on Community Benefit

A recent study questioned how nonprofit hospitals communicate with patients who are eligible for charity care and what they charge for the care provided. The only conclusion that can be drawn with certainty is that the researchers don’t understand how the relevant section of the law, Sec.501(r), is supposed to work. 

The researcher’s inclusion of only data regarding the completion of Community Health Needs Assessment (CHNA) by the end of 2012 is problematic because hospitals are on a 3-year timetable to complete a CHNA. 

Researchers misunderstood that, according to the law, it is up to each hospital to determine the criteria for charity care eligibility. Finally, the study misinterprets the application of the law’s reasonable efforts requirements that hospitals need to make before initiating collection activity. As the requirements only apply in the event a hospital reports to a credit agency or pursues a collection action, the conclusion the study makes about compliance is incorrect. 

What is glaringly missing is what hospitals do provide to patients who need assistance. Hospitals offer a range of services either free or at reduced costs through community benefit programs.  A 2013 study by Ernst & Young reported that hospitals provided 12.3% of expenses on community benefit - an increase from when the ACA was first enacted in 2010. 

Hospitals work with individual patients to determine what their financial obligation is. However, hospitals could do even more for their patients and communities if the Administration would allow hospitals to subsidize insurance premiums for those individuals who need financial assistance.