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BUSINESSNonprofit hospitals under scrutiny: The IRS cracks downMost of the nation's hospitals were founded with a charitable mission. But there's a growing cry that they aren't fulfilling it because of a desire for money.By Katherine Vogt, AMNews staff. Nov. 22/29, 2004. A spotlight is shining on nonprofit hospitals, but the attention is probably unwanted. Some of these hospitals are the unwitting co-stars in a handful of investigations and legal actions that aim to see whether they are meeting their expectations as charitable organizations. The Internal Revenue Service has launched an investigation into whether executives at various nonprofits, including hospitals, are being paid too much in violation of their tax-exempt status. Numerous lawsuits have been filed accusing nonprofit hospitals of overcharging the uninsured. And state and local authorities, feeling that hospitals are not fulfilling their charitable missions, have cracked down on some property tax exemptions. Bill Monnig, MD, a urologist in the Cincinnati area and chair of the Organized Medical Staff Section of the AMA, said physicians have a stake in what happens to nonprofit hospitals. In particular, Dr. Monnig said physicians need assurances that nonprofit hospitals won't use the money they save in taxes to invest in for-profit facilities that would compete with physician practices. "That's the threat. What needs to be made certain in these nonprofit hospitals is that they are in fact using their funds appropriately, and that there are auditing mechanisms." "I don't think we need necessarily more laws, we just have to use the laws that are there now to hold these people accountable," he added. The AMA has taken no formal position on any of the recent investigations, lawsuits or actions directed against nonprofit hospitals. [...]Full text of AMNews content is available to AMA members and paid subscribers.
Copyright 2004 American Medical Association. All rights reserved.
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