P.O. Box 409095
Chicago, IL 60640
Length: 3 minutes, 11 seconds
Interviewer: David Burda, editor, Modern Healthcare magazine
Interviewee: Thomas Royer, president and CEO, Christus Health
[00:00:00.00] David Burda: This is Dave Burda, editor of Modern Healthcare, and it's Monday, June 18. Visiting with us today is Dr. Tom Royer, president and CEO of Christus Health in Dallas. Dr. Royer, one of the hot topics right now is this revised Form 990 that the IRS sent out last week requiring some new reporting to be done by not-for-profits. Have you been following that issue?
[00:00:29.26] Thomas Royer: Yes, we have. And, in fact, we're very supportive of the areas that they are enhancing.
[00:00:35.16] David Burda: Okay, now it looks like the IRS is going to follow the Catholic Health Association's definition of community benefits. Is that a definition that Christus Health follows?
[00:00:47.09] Thomas Royer: Absolutely. We--it's again separated into two parts, predominantly, what we call true charity care, which is the care that is rendered to a patient for which you put no charges or send no bill. And the second part is truly what we'd call community benefit, which is anything else that you're contributing to care that's not directly associated with their bill, or the care you're providing to Medicaid and Medicare patients, with the difference between your cost and your reimbursement. For us and our system, that first number is about $258 million a year of true charity care, and our total community benefit, based on our audited statement as of June 2006, is about $525 million, almost, it's over half a billion dollars.
[00:01:35.14] David Burda: Now, do you currently report those figures out to the community other than what may be required by the IRS?
[00:01:43.10] Thomas Royer: Yes.
[00:01:43.10] David Burda: Do you do an annual report or something like that?
[00:01:45.08] Thomas Royer: We do an annual report that's published; number two, we are a totally transparent company, so it's reported out on our Web page for anyone that wishes to utilize it. And because we have a large number of facilities in Texas, by Texas law we must report charity care to the Texas legislature and government, and it must be at least 5%. Our goal as a company is 10%.
[00:02:09.19] David Burda: Do you think the IRS' new requirements, will they be a burden on Christus Health at all?
[00:02:12.28] Thomas Royer: They will not be a burden at all. I think that we have the bookkeeping and the methodologies from an accounting standpoint in place because we have really been supporting this since our inception.
[00:02:25.25] David Burda: Last question. Any recommendations for any other tax-exempt hospitals that may face this reporting requirement for the first time?
[00:02:34.19] Thomas Royer: Well, I think clearly, to make sure that you have the processes in place to capture these numbers; to have a description of what programs are providing these services; and to have accurate accounting of what your outcomes are in each of these areas, because clearly we know there is a lot of attention paid to the taxable or nontaxable income of not-for-profit organizations. And if we can't prove this, that exemption is going to be taken away and we'll only make healthcare for not-for-profits much worse in America.
[00:03:06.24] David Burda: Very good. Dr. Royer, thanks for your time.
[00:03:09.20] Thomas Royer: It's my pleasure.