The effect of the affordable care act on not-for-profit hospitals and the justification of tax-exempt benefits.

摘要

The tax-exempt status of not-for-profit hospitals in the United States has long been under scrutiny. Exemption began when associations among the settlers were deemed charitable to care for the sick or indigent. While requirements to remain tax exempt have changed through the centuries, many hospitals continue to hold a tax-exempt status. The looming question today is whether the tax-exempt hospital offers sufficient uncompensated care and community benefit to justify the benefits received through tax-exempt status, as evidenced through the Affordable Care Act (ACA) and reporting changes to Form 990 (Return of Organization Exempt of Tax). Hospitals risk having their tax-exempt status rescinded if they cannot prove the activities and programs they provide to the community justify their tax-exempt status. Through an in-depth review of scholarly articles, the evolution of tax exemption and the new requirements for tax-exempt hospitals under the ACA was explored. A comparative analysis of the articles was conducted and the data for specific state community benefit requirements were obtained through the Hilltop Institute. The data were assembled into tabular form, and categorized by individual states, in order to view the trend in state requirements. These data were used to determine the extent that not-for-profit hospitals defend their tax-exempt status through the amount of care and benefit they provide to the community. The research found that the changes made to the Form 990, and those instituted by the ACA, did not provide a way to measure whether tax-exempt facilities provide more community benefit than for-profit facilities. The particular state requirements vary but were used to propose a standard of measurement for the federal government to implement in order to determine if tax exemption for a particular hospital is justified.