Health Care

Health Care

The Big Story 

Nonprofit hospitals enjoy generous tax breaks in exchange for providing “charity care” to their communities, but Sen. Bernie Sanders (I-Vt.) is less than convinced about the degree of care these institutions give.

© Greg Nash, The Hill

Sanders, who chairs the Senate Health, Education, Labor and Pensions (HELP) Committee, issued a report Tuesday criticizing how tax-exempt hospitals follow through on their obligation to provide free or reduced care.

Under the Affordable Care Act, nonprofit hospitals — which account for roughly half of all hospitals in the U.S. — must have a Financial Assistance Policy that applies to all services provided at the facility. This policy must be widely publicized, but Sanders said that isn’t happening. 

“Those hospitals have made information about their charity care programs difficult to access, leaving many patients unaware that they may qualify for free or discounted care,” he wrote.

Sanders further blasted the small amount of overall funding hospitals spend on charity care, citing cases where some major health systems use less than 1 percent of their overall budgets for these obligations.

This issue has already piqued some bipartisan interest, as the committee’s top Republican, Sen. Bill Cassidy (La.), joined with other senators last month to examine hospital compliance with tax-exempt requirements.

“We are alarmed by reports that despite their tax-exempt status, certain nonprofit hospitals may be taking advantage of this overly broad definition of ‘community benefit’ and engaging in practices that are not in the best interest of the patient,” Cassidy and the other senators wrote in a letter to the Treasury Inspector General for Tax Administration. 

“These practices – along with lax federal oversight – have allowed some nonprofit hospitals to avoid providing essential care in the community for those who need it most.”  

But according to the American Hospital Association, tax-exempt hospitals are a significant benefit to their communities. The group published its own report Tuesday pushing back on criticisms, asserting that tax-exempt hospitals’ and health systems provided more than $129 billion in total benefits to their communities in 2020, and used 15.5 percent of their total expenses for community benefits.

Welcome to The Hill’s Health Care newsletter, we’re Nathaniel Weixel and Joseph Choi — every week we follow the latest moves on how Washington impacts your health.

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