Florida state Sen. Alberto Gutman plans to propose a bill requiring not-for-profit hospitals to provide more charity care as a condition of retaining their tax-exempt status.
Florida's Senate Finance, Taxation and Claims Committee last month endorsed the drafting of a bill that would increase the standards not-for-profit hospitals must meet to qualify for tax exemptions. Mr. Gutman, a member of the finance panel, said he would cosponsor the bill along with several other committee members.
The tax exemption became an issue in Florida last fall when Columbia Healthcare Corp. issued a report suggesting that state laws governing tax exemptions should be reconsidered because some not-for-profit hospitals don't provide enough charity care (Nov. 1, 1993, p. 3).
Columbia's report compared potential tax burden of seven not-for-profit hospitals in southwest Florida with the amount of charity care they provided. The report, which was criticized by the not-for-profit hospitals, said six of the seven provided less charity care than the value of their tax exemptions.
Mr. Gutman said he agrees with Columbia's position, and he doesn't believe enough not-for-profit hospitals provide sufficient charity care. Also, he doesn't believe Florida taxpayers should subsidize not-for-profit hospitals. Finally, he said most of the 92 for-profit hospitals in the state want the state's laws changed so they can be more competitive.
"It's not just Columbia. Every for-profit institution wants a bill passed, and rightfully so," Mr. Gutman said. "They are looked on as the black hats because they are for-profits, while the white hats, the not-for-profits, aren't providing as much charity care as they should."
The Florida League of Hospitals, which represents most of the state's for-profit hospitals, supports requiring not-for-profit hospitals to provide charity care that's equivalent to or greater than the amount of the value of their exemptions from sales and property taxes.
"The issue will not go away, regardless of what (the Legislature) does," said Ralph Glatfelter, the Florida League's president. "If universal coverage is achieved, the issue of tax exemptions will be even greater."
In response to Mr. Gutman and increased scrutiny at the state and federal level of not-for-profit hospitals' provision of charity care, the Florida Hospital Association in December created a community benefits task force. It will develop a method for hospitals to assess and document a wide spectrum of community benefits, including charity care, subsidized services to the poor, and the costs of research and education, said Charles Pierce, FHA's president.