Proposed IRS form revision irking nonprofit hospitals

Institutions would need to provide more details about their charity care efforts and other financial data.

By Dave Hansen, AMNews staff. July 9, 2007.

Nonprofit hospitals will have to quantify to the IRS how much they give back to their communities, including details about how much charity care they provide, under a proposed revision of a form that tax-exempt organizations fill out each year.

The new Form 990 includes a separate schedule for nonprofit hospitals. The current form has only a vague section asking nonprofits to describe their most significant activities, said Julie Trocchio, senior director of community benefit and continuing care for the Catholic Health Assn. of the United States. "It was no different from the Girl Scouts to museums," she explained.

The proposed form would ask nonprofit hospitals to detail how much money they spent on a number of specific areas, such as charity care, unreimbursed Medicaid costs and health professions education.

Schedule H also asks nonprofit hospitals to describe their collection and billing practices and seeks details as to their joint ventures, such as specifying the ownership interests of doctors in any for-profit activities.

The form comes as more attention has focused on whether nonprofit hospitals are carrying out effectively their charitable missions, as well as how they bill uninsured patients.

Provena Covenant Medical Center of Urbana, Ill., lost its tax-exempt status in 2006 when the Illinois Dept. of Revenue ruled that it did not provide enough charitable care. As a result, the hospital paid almost $5 million in property taxes by the end of 2006.