The IRS’s interim report on hospitals and community benefits was released last week, one day after the latest missive from Sen. Chuck Grassley.
One interesting point of comparison: Grassley would condition hospitals’ tax-exempt status on spending 5% of annual patient revenues or operating expenses (whichever is greater) on charity care. The survey shows that a quarter of all hospitals provide only 1% and over half of hospitals provide only 3%; only about 20% of hospitals provide more than 10%.
The WSJ Health Blog asks whether the IRS should be in the business of setting a 5% charity care threshhold. Some say yes; some say no.
Truth is, the IRS has been wrestling with this for a long time and has not come up with a bright-line test; it seems that instituting one will create at least as many problems as the current more diffuse test has engendered.
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