THE WEEK IN HEALTHCARE;HOSPITAL TRUST FUNDS LOSE IN FLA. TAX RULING
Skip to main content
Sister Publication Links
  • Modern Healthcare Metrics
MDHC_Logotype_white
Subscribe
  • Subscribe
  • Register
  • Login
  • News
    • This Week's News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Kaiser Permanente seeks to address trauma in 25,000 schools by 2023
      House committee springs new surprise billing proposal, calls for delay
      Hospitals need more than HCAHPS to measure patient experience, report says
      ACA exchange enrollment lags as deadline nears
    • Kaiser Permanente seeks to address trauma in 25,000 schools by 2023
      KPC Group misses key deadline on Verity hospitals purchase
      Not-for-profit hospitals stabilized by Medicare pay raise, DSH cut delays
      November was healthcare's second strongest hiring month of 2019
    • ACA exchange enrollment lags as deadline nears
      Plan members unlikely to benefit from Supreme Court risk corridor battle
      Joan Budden
      Q&A: Priority Health CEO eager to share best practices with Total Health Care
      Silver-loading, CSR elimination lowered premiums for some rural enrollees
    • Capitol Building with pills
      Week Ahead: House to vote on drug bill; SCOTUS hears risk-corridor case
      MedPAC thinks hospice payments are too high
      MedPAC says ambulatory surgical centers don't need a pay raise
      States focus on healthcare costs to address coverage problems
    • Analysts to CommonSpirit Health: Show us the savings
      Smallest hospitals saw biggest earnings gains last month
      Sutter Health postpones financial filing
      doctor helping patient stock image Sandoz
      Sponsored Content Provided By Sandoz
      As hospital executives look to reduce costs, biosimilars offer a compelling option
    • astronaut
      Astronauts developed bloodstream issues in space
      Sponsored Content Provided By ABM Healthcare
      Protecting and Maintaining Medical Devices
      human hand robotic hand stock image
      Sponsored Content Provided By Deloitte
      The Health System of the Future: How Digital Health Technology is Transforming Care
      EHR
      EHR vendors most in-use throughout Medicare incentive program
    • Hospitals need more than HCAHPS to measure patient experience, report says
      Promising greater safety, a tiny widget creates chaos for tube feeders
      IHI releases principles for improving patient safety measures
      MRIs of dense breasts find more cancer but also false alarms
    • Kaiser Permanente names Gregory Adams CEO
      Google Health hires AliveCor's chief medical officer
      Trinity Health appoints new COO: Ben Carter
      Jim Allison playing the harmonica
      Documentary tells tale of Nobel winning researcher
    • Midwest
    • Northeast
    • South
    • West
  • Special Features
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • Chest x-ray from a patient with a vaping-related lung injury
      Vaping-related cases lead to care guidelines from Intermountain
      Arkansas Children’s was a founding partner in Solutions for Patient Safety.
      Children's hospitals collaborate rather than compete on patient safety
      Peer recovery specialists at St. Barnabas Medical Center work with nurse Brenna Zarra.
      Peer recovery helping patients with addiction seek treatment
      UNC Health Care trains staff to treat dementia patients
    • Linda Kenney
      Patient advocate recalls two medical errors that nearly killed her
      Betsy Lehman
      Recent safety scandals suggest healthcare leaders haven't learned lessons
      Doctors and nurse with patient
      20 years after 'To Err is Human,' hospital care quality measures are still of little use
      Dr. Christine Cassel
      To err is human. That’s still true 20 years later, but some solutions to the problem aren’t helping
    • Advanced ICU Care
      Telemedicine helps rural hospitals meet intensivist shortage
      Randy Oostra, CEO of ProMedica
      HCR ManorCare deal laid foundation for ProMedica’s growth
      Paging Dr. Robot: Artificial intelligence moves into care
      A child being screened for vision problems using a smartphone.
      App screens kids for eye problems before they can talk
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • ProMedica doubles down on social needs data analysis
      Amazon taps first pharmacy for Alexa Rx management
      Trump administration unveils new price transparency rules
      A child being screened for vision problems using a smartphone.
      App screens kids for eye problems before they can talk
    • Health systems weigh return on investment as they ramp up tech
      VA dives into artificial intelligence R&D
      Home health to pare down therapy services, up telehealth offerings
      Amazon launches medical transcription service
    • Chest x-ray from a patient with a vaping-related lung injury
      Vaping-related cases lead to care guidelines from Intermountain
      Advanced ICU Care
      Telemedicine helps rural hospitals meet intensivist shortage
      Peer recovery specialists at St. Barnabas Medical Center work with nurse Brenna Zarra.
      Peer recovery helping patients with addiction seek treatment
      UNC Health Care trains staff to treat dementia patients
    • Value-based pay still struggles to improve costs, quality
      Hospitals sue HHS over negotiated price disclosure rule
      Bundled payments get a boost in two states with employee programs
      CMS wants primary-care docs to take on financial risk
  • Data/Lists
    • Rankings/Lists
    • Data Points
    • Modern Healthcare Metrics
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Randy Oostra, CEO of ProMedica
      HCR ManorCare deal laid foundation for ProMedica’s growth
      Steve Strongwater
      How Atrius Health stayed independent by not shying away from risk
      Why moving the VA to a new EHR was a pivotal decision
      Why AdventHealth's rebrand was more than a name change
    • Terry Shaw
      A diverse and inclusive culture should empower others
      Paving the path to diversity and inclusion
      The next step in healthcare evolution
      Breaking Bias: A road map to boost women and minorities into healthcare leadership
    • Dr. Richard Snyder
      Outdated privacy laws hinder coordinated care, especially in the fight against addiction
      David Dill and Keith Myers
      Healthcare partnerships are a proven path to better care, healthier communities
      Health systems need to devote more resources to caring for the caregivers
      Chip Kahn and Alan Morgan
      Rural healthcare needs innovation, policy changes to survive
    • Letters: Let’s keep humanity in discussions about patient safety
      Hospital with money
      Letters: Let providers set their prices,
 and then publish them all
      Letters: Ambulatory surgery centers aren't getting a break on regulation
      Letters: Rising Medicaid spending isn't a windfall for providers
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Nominate
    • Award Programs
    • Previous Award Programs
    • Other Award Programs
    • Nominations Open - Top 25 Minority Leaders
      Nominations Open - Health Care Hall of Fame
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Critical Connections: Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Health Care Hall of Fame Gala
    • Top 25 Women Leaders Gala
    • Best Places to Work Awards Gala
    • Top 25 Minority Leaders Gala (2020)
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. News
January 29, 1996 12:00 AM

THE WEEK IN HEALTHCARE;HOSPITAL TRUST FUNDS LOSE IN FLA. TAX RULING

Jerry Geisel
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Trust funds created by tax-exempt hospitals to cover their medical malpractice and workers' compensation risks are not entitled to favorable tax treatment, a federal appeals court said.

    The 11th U.S. Circuit Court of Appeals in Atlanta said that under a 1988 law, trust funds that purchase insurance, but not those that cover risks themselves, can qualify as tax-exempt "cooperative hospital service organizations."

    Affirming a U.S. Tax Court ruling, the appeals court said the trust funds were not purchasing insurance but instead were acting as insurers by extending coverage in return for premiums based on the risks involved. That activity, the court said, is not eligible for favorable tax treatment.

    While the 1988 law may have created some unfair results-large tax-exempt hospitals can self-insure their own risks, but smaller hospitals that band together and form these trusts could not-the judicial branch cannot undo the "imperfect" work of legislators, the appeals court said.

    The ruling in the case of Florida Hospital Trust Fund et al. vs. Commissioner of Internal Revenue is a blow to the trust funds organized by several dozen Florida hospitals. With the trust funds considered taxable organizations, the income earned by them will be taxed.

    Nationally, though, the impact will be minor.

    For example, the ruling would have no effect on the hundreds of tax-exempt pools organized by public organizations to cover their property/casualty risks. Section 115 of the Tax Code gives favorable treatment to public entity pools, said Tom Jones, a partner with the law firm of McDermott, Will & Emery in Chicago.

    Pools formally organized as reciprocals by tax-exempt organizations also receive favorable treatment under Section 832(f) of the Tax Code, he said.

    The appeals court ruling involves three Florida trust funds:

    The 23-member Florida Hospital Trust Fund, which provides coverage of up to $250,000 per claim with an annual aggregate limit of $1 million.

    The Florida Hospital Excess Trust Fund, which has 26 members that provide up to $10 million of coverage with a minimum retention of $250,000 per claim and an annual aggregate retention of $1 million.

    The 31-member Florida Hospital Workers' Compensation Fund, which was established to cover workers' compensation claims.

    The trust funds receive payments from members based on actuarial projections. Those payments are adjusted later, resulting in other assessments or a refund or credit to reflect the funds' actual experience.

    In 1990, the funds applied to the Internal Revenue Service as tax-exempt hospital service organizations. In 1992, the IRS denied the requests, saying the trust funds' activities were not covered by the list of exempt activities of tax-exempt hospital service organizations.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    Modern Healthcare
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Special Features
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Data Points
      • Modern Healthcare Metrics
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Nominate
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Critical Connections: Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
      • Galas
        • Health Care Hall of Fame Gala
        • Top 25 Women Leaders Gala
        • Best Places to Work Awards Gala
        • Top 25 Minority Leaders Gala (2020)
      • Webinars
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing