Notes on the news: In our March 21 cover story (p. 6), reporters Joe Carlson and Melanie Evans examined new disclosures of community benefits by tax-exempt hospitals. This information was included in the first and limited rollout of Internal Revenue Service Schedule H filed with annual Form 990 disclosures.
The results were underwhelming. On average, each hospital devoted 2.5% of all its expenses to providing charity. If losses on Medicaid and other subsidies were included, the figure rose to 8.3%. Overall, nine out of 10 respondents failed to provide enough free and discounted care to earn tax breaks under a congressional proposal that would have forced hospitals to devote 5% of their expenditures to care for the poor.
Later, on this page (March 28, p. 24), we predicted that economic conditions would put more pressure on hospitals to substantially increase charity care or risk unwelcome scrutiny. Reinforcement of that point came last month in Illinois when the state Revenue Department moved to yank the tax exemptions of three facilities (Aug. 22, p. 14). The department added that it is reviewing the exempt status of as many as 15 other hospitals.