Ohios attorney general is the latest state official to dig into the ways not-for-profit hospitals earn and spend their money, just as the Internal Revenue Service phases in its supercharged Form 990 that mines much of the same contentious territory.
Attorney General Marc Dann expects to generate a plan by the end of 2008 that will hold charitable organizations, not just hospitals, accountable to clear standards of good behavior. He met with the board of the Ohio Hospital Association this month to begin a discussion about community benefits and billing and collection practices.
My idea is that we need to have a set of standards that people can understand (and that) they know what to expect of us in terms of enforcement, Dann said. When a hospital doesnt meet its burden of charity care, those patients are going to go someplace. One hospital is going to be carrying an extra burden.
Observers of the IRS new Schedule H, designed just for hospitals, are predicting the reams of clear and comparable information made public will re-energize state-level interest in whether tax-exempt hospitals are living up to the charitable mission they claim (Nov. 12, 2007, p. 46). Already at least 22 states have laws asking hospitals to report what they spend on community benefits, and Pennsylvania, Texas and Utah require those expenditures to meet a minimum threshold, according to a report generated by the Minnesota Health Department when the states legislators were looking into the issue last year.
The Ohio Hospital Association wants to ensure Dann embraces the broad range of community benefits that will be reported to the IRSeducation, research and so forth in addition to strict charity careand that he doesnt force hospitals to repeat homework theyll be doing for the feds. Its really going to come down to the details, spokeswoman Tiffany Himmelreich said.
Dann said that the new 990 will assist us in the transparency piece of this dramatically, but that hes not willing to wait the two years it will take for the data to materialize. My term ends in 2010, he said. And, he noted, the IRS goals dont fully match his duty to make sure Ohio charities are serving the public interest.
In Ohio, its within the attorney generals authority to create and enforce rules governing charities without the Legislature, and Dann said that he can ask a judge to force violators into receivership or reassign their assets. But to come up with an approach thats both effective and workable, Dann has promised to engage hospitals, community groups and public policy organizations in a wide-ranging conversation.
Alan Bleyer, president and chief executive officer of four-hospital Akron (Ohio) General Health System said Dann is starting off on the right foot by working together with the industry, a sentiment the Ohio Hospital Association echoed. Danns predecessor, Jim Petro, tried the opposite approach, unveiling a set of rules that were roundly criticized and ultimately dropped.
Bleyer added, however, that Dann will have a hard time getting hospitals to agree on one threshold of community benefit that applies to everyone. Hes dealing with a very diverse group of institutions, some of which have extensive resources, some of which dont.