Expectations and Efforts Regarding Community Benefit Spending

Benefiting the Community and those In Need
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Benefiting the Community and those In Need
Introduction
Many healthcare organizations in the United States (U.S) operate as nonprofit entities and, as a result, are exempted from local, state, and federal taxes. This favor tax status is tailored to recognize these institutions’ commitment to providing “community benefits.” Controversy exists within public domains regarding whether nonprofit health care facilities offer enough community benefits to meet the eligibility criteria for tax exemption. This led to scrutiny efforts at the federal level, leading to the inclusion of community benefits policies within the Affordable Care Act (ACA). Apart from being part of the approach to address ACA prioritization of population wellness and preventive care, these requirements were designed to enhance accountability and transparency within the healthcare system. This paper discusses the expectations of nonprofit hospitals concerning Community Benefit Spending, state efforts to ensure these organizations adhere to such expectations, and Maryland’s 2010-2016 performance in regards to community benefits requirements.
Expectations for Hospitals about Community Benefit Spending
The ACA has three key expectations for nonprofit hospitals regarding community benefits. First, nonprofit hospitals are expected to assess their community’s wellness needs every three years and design strategies to meet the identified needs. Accordingly, the healthcare organization should seek input from different community stakeholders, including public health leaders. The ACA requires that the assessment addresses financial and other constraints to care and the need to prevent disease and ensure sufficient nutrition, including addressing environmental, behavioral, and social factors influencing emergency preparedness or community health (James, 2016). Second, each nonprofit healthcare organization is expected to develop a written financial assistance program for medically necessary and emergency care. The financial assistance program should include essential information concerning whether the facility provides discounted or free care; the eligibility criteria for financial aid; details of the assistance application process; information about how much clients are expected to pay; the payment procedures they will employ; and measures the healthcare facility would take to publicize the program to the community (James, 2016).
Third, nonprofit hospitals are expected to comply with specified limits on charges, billing, and collection activities. According to Folkemer et al. (2011), Obamacare limited charges, billing, and collection efforts tailored for uninsured persons. Healthcare organizations might not participate in extraordinary collection activities before making efforts to establish qualifications for financial help. Moreover, hospitals are not expected to charge persons qualified for financial help more than they charge insured persons for similar care. In addition, nonprofit hospitals are expected to report to the Internal Revenue Service (IRS) the outcomes of the community health need evaluation, an implementation program to meet the identified needs, a detailed description of how the facility meets or plans to meet those needs, as well as a summary of why any established needs are not being sufficiently addressed. Nonprofit healthcare facilities are also expected to provide audited financial reports. Accordingly, failure to comply with the reporting requirements subjects a hospital to an excise tax penalty amounting to $50,000 (Folkemer et al., 2011).
State Efforts to ensure Hospitals Adherence to Expectations
States require nonprofit healthcare facilities to work towards meeting ACA requirements regarding investment in community benefits. Accordingly, states dictate that healthcare facilities file community benefits initiatives reports, detail their efforts in addressing social factors impacting community health outcomes, and invest in meeting the health needs of traditionally underrepresented or marginalized groups. Some states also mandate nonprofit healthcare facilities to spend a specified minimum threshold on community benefits investments. States also employ different enforcement approaches to ensure nonprofit healthcare organizations comply with their regulations (Clary, 2018). In t...