High prices raise questions about hospitals’ charity status
By Patrick Malone, The Santa Fe New Mexican | |
McClatchy-Tribune Information Services |
It's the foundation of nonprofit hospitals' tax-exempt status and a badge of honor that hospitals, regardless of whether they belong to for-profit companies, tout as a measure of benevolence to the communities they serve.
But charity can also be the gateway to tangible financial benefits for hospitals.
Nationally, and in
What patients can't afford to pay, the hospitals chalk up as losses, and the higher their prices, the more charitable each forgiven bill appears.
"There must be a benefit to the institution, or else they wouldn't bother," said Dr.
Hospitals and the professional associations that represent them emphasize that few of their patients actually pay the sticker price for their services. So much so, said
"Many people in the industry feel that the chargemaster we've worked on for years is really pretty irrelevant," he said.
Patients with private insurance pay the rates their insurers have negotiated with hospitals, usually much less lucrative to a hospital than its sticker price. And patients with
Virtually the only group that is billed the full cost for medical services is the uninsured, and they seldom pay the full amount, according to hospitals and the associations that represent them.
"Typically self-pay is no pay," said
Universally, the
"All hospitals, regardless of the nonprofit status, want to document and show their benefit to the community," the
"From my perspective, it's a service to the community," St. Vincent's Moon said. "That's probably the advantage of it."
But for nonprofit hospitals, such as St. Vincent, uncompensated care has tangible benefits. It is the basis for the hospital's request for a property-tax exemption on one of the satellite surgery centers it has acquired.
SVH Support, a local nonprofit that has 50 percent ownership of the
Already, SVH Support enjoys a 50 percent property tax exemption on the surgery center, which reduced its obligation to the county to
According to the Assessor's Office, the current exemption decreased
"When you take a property out of a taxable status, it shifts the burden to all of the other taxpayers," said
"When we own the building and the tenant is this charitable entity,
That's under review by the Assessor's Office.
"When you have physicians in a building and they're charging for their services, you have to prove that they're operating in a charitable manner," Perez said. "It's hard for us to consider them a fully charitable organization when they charge for services and bill insurance companies."
In its application for a property-tax exemption on file with the Assessor's Office, SVH Support reports more than
He was forgiven
While the discount was welcome, he scoffs at the notion that it was charitable.
"That was so nice of them," Rigsby said, "when their charges are five to 10 times the actual cost."
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