Why nonprofit health systems must disclose their financial transactions and insider relationships to government taxation agencies

  • Non profit

    Money Pile 00 dollar bills

    Money Pile 00 dollar bills

  • Nonprofit health systems, which are 69% of the US hospitals, were included within the list of tax-exempt organizations selected to receive from the IRS. The value Of nonprofit hospital Tax exemption was $24.6 Billion In 2011. One goal of this tax exemption is to help nonprofit hospitals to provide uncompensated care for uninsured.
  • However, Most research studies that have compared both nonprofit and for-profit hospitals in terms of community service and financial assistance to uninsured patients show no substantial differences between them. Thus the tax exemption for nonprofit hospitals is unjustifiable.
  •  The Affordable Care Act (ACA) requires tax-exempt hospitals to engage in improving community health. The magnitude of the tax exemption, coupled with ACA reforms, stresses the public’s interest not only in community benefit spending generally but also in the extent to which nonprofit hospitals allocate funds to improve the overall health of their communities.
    Unfortunately, The Treasury/IRS regulations have not interpreted the ACA’s provisions covering the expanded obligations of nonprofit hospitals that seek tax-exempt status. The absence of a clear definition of what charitable expectation are, it is difficult to evaluate its magnitude.
  • The city’s top nonprofit hospitals enjoy the tax-free perks of charitable organizations and receive millions of dollars in state aid — yet spend less than 2 percent on the poor in the form of free care” Writes Tara Palmeri in New York post, June 2nd 2014. For example, New York Presbyterian Hospital had $3.9 billion in revenue in 2012, but administered only 1.03  percent, or $37.6 million, in free care for the uninsured. Meanwhile, the Executive vice Chairman received $5.58 million and CEO $3.58 million annual salary.
  • Disclosing all the financial transactions and insider relationship to the IRS, will force hospitals to provide an adequate care for uninsured patients (quality and quantity). They will  provide community services that are sufficient to maintain their tax subsidy.Gross-revenueCEO-COMP

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One Response to “Why nonprofit health systems must disclose their financial transactions and insider relationships to government taxation agencies”

  1. sbfphc Says:

    Important idea and makes one also want to investigate other non-profits that provide services like higher education!

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