Miller told conference attendees that his office is nearly ready to release its long-awaited final report on enforcement at not-for-profit hospitals, including its findings of executive compensation.
Nearly all hospitals surveyed appeared to have used comparability data and the rebuttable presumption of reasonableness provisions in the excess-benefit rules on executive compensation. I think that is a good thing, Miller said. Still, the compensation amount paid to the top management officials will be considered high by some.
The report will also reveal that on average, not-for-profit hospitals spend 9% of their total revenue on community-benefit activities with the cost of uncompensated care accounting for just over half of that total figure. Meanwhile, tax-exempt hospitals reported an average profit margin of 5%.
Last year, Sen. Chuck Grassley (R-Iowa), ranking member of the Senate Finance Committee, presented a staff draft proposal that would force not-for-profit hospitals to devote at least 5% of revenues to charity care in order to justify tax exemption. Grassley is expected to introduce similar bright line legislation this year.
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