Becker's Hospital Review

Finance, Revenue Cycle & ICD-10 34 As a county-owned hospital, there are extra calls for transparency on the district's allocation of taxpayer money, in addition to the hospital's property tax exemption. In fiscal year 2011, Mr. Romanello says the district had $233 million in total expenditures, 94 percent of which were directly used to provide healthcare services to Palm Beach County residents. The other 6 percent went to administration and overhead. The HCDPBC has more than 1,000 full-time employees and sits on a large plot of land. Mr. Romanello says the district has proved its value to the community through its transparency and commitment to serve those who pay into it — and other non-profit hospitals should look at their organization the same way. "The criticisms will always be that non-profit hospitals have a competitive advantage over forprofit folks, but non-profit folks have an obligation to provide sufficient charity care and community benefit that warrants the continuing of the tax-exempt status," Mr. Romanello says. What hospital executives need to do As of right now, there is no eminent danger of non-profit hospitals and health systems collec- tively losing their property tax exemptions. However, the state-by-state scrutiny does not appear to be subsiding any time soon. There are several things hospital executives can do to show their tax exemptions are not being wasted. First, hospitals and health systems must continue to expand their community benefits reports. Community benefit reports should go beyond the traditional figure of charity care and show all the different ways hospitals are providing benefits to the area, such as coverage for shortfalls from Medicare and Medicaid, investments in local research and sponsorship of wellness initiatives. These reports should also be posted online — and easy to find. Mr. Crane also says hospitals should re-evaluate their financial assistance policies to make sure people who were eligible are receiving the right care at no cost. Specifically, hospitals should go beyond the federal poverty level when determining a patient's need for financial assistance. At Salem Health, the financial department uses a sliding scale where a patient is eligible for financial assistance up to four times of the FPL. Finally, hospital executives must continually illustrate to their community why they matter. Moody's: Obama's Second Term is Credit Neutral for Non-Profit Hospitals By Bob Herman  Tax exemptions are a big deal, and communities must be reminded why their hospital or health system is such an integral part of their lives. "Non-profit hospitals are all different," Mr. Phillips of Draffin & Tucker says. "There are large systems engaged in medical education, research institutions, tertiary care facilities, critical access hospitals — they all play a role. What each of those hospitals needs to do is understand how to meet minimum [charity care] standards but also to document the other benefits they are providing to those communities, especially for the vulnerable populations." Hospitals also need to ensure they are not just honing in on "charity care." It is the most common figure to look at, but total investment into the community is the most important idea to disseminate to residents. "Look at the purpose of a 501(c)(3)," Mr. Crane adds. "That organization does things that otherwise wouldn't be done in the community. Who else is going to put in a trauma system, where within 15 minutes you have highly trained people trying to save your life? That's something that can't be quantified. Community benefit is not just measured in dollars of charity care." n Uncompensated Care Costs Could Top $53B by 2019 By Bob Herman  H ospitals may see uncompensated care costs rise by $53.3 billion by 2019 due to the Supreme Court's ruling on the Medicaid expansion within the healthcare reform law, according to a study from the National Association of Public Hospitals and Health Systems. P In June 2012, the Supreme Court said the Medicaid expansion provision within the Patient Protection and Affordable Care Act is optional for states, and states would not lose original Medicaid funding if they did not expand the program. Moody's analysts said President Obama's healthcare policies, primarily the Patient Protection and Affordable Care Act, had already been factored into the non-profit hospital industry's outlook. Since the PPACA will move forward, the same credit risks remain for those organizations, according to the report. NAPH conducted a study to see how hospitals would be affected by this decision. Using data from the Congressional Budget Office, the U.S. Census Bureau and the American Hospital Association, NAPH found hospitals would take on an additional $53.3 billion in uncompensated care by 2019. That amount coincides with roughly $14.1 billion in reductions to Medicaid disproportionate share hospital payments through the same time span. The biggest long-term credit negatives for hospitals are embedded within the PPACA, such as $150 billion of reduced Medicare reimbursements to hospitals over 10 years and $14 billion of Medicaid disproportionate share hospital payment cuts. However, Moody's analysts said the individual mandate will at least be a "discreet credit positive" for the non-profit hospital sector as millions of individuals will gain access to health insurance starting in 2014. n "Congress certainly didn't foresee this level of uninsured and uncompensated care when it enacted the ACA," NAPH President and CEO Bruce Siegel, MD said in the news release. "In this light, the deep cuts to disproportionate share hospital payments over the same period are simply untenable and will prove devastating to society's most vulnerable and to the providers who care for them." n resident Barack Obama's re-election was a major event for the entire country, but it's a relatively neutral event for the credit of non-profit hospitals, according to a report from Moody's Investors Service.

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