Hospital and environmental variation in Texas nonprofit hospital organizational policies regarding charity care

The 2005 Annual Statement of Community Benefits Standard (ASCBS) and the annual report of the Community Benefits Plan, Summary of Current Hospital Charity Care Policy and Community Benefits, were used to identify various environmental and policy relationships with regard to eligibility for charity care requirements, a component for meeting the nonprofit requirements established by the Texas Legislature for nonprofit tax exemption (Texas Health and Safety Code, §311.04610). ^ Charity care policies are established by the individual hospital (or systems) and are generally defined as rules concerning care provided by the institution without the expectation of payment. This study has been undertaken to provide specific information about the charity care eligibility requirement policies of nonprofit hospitals. These hospitals are the part of the safety net for those persons who are indigent, low-income and uninsured. This study examines nonprofit hospitals by physical location, bed size, religious affiliation, trauma level, disproportionate share, and teaching designations. County information includes population, percentage of residents eligible for Medicaid benefits, ethnic makeup of county residents, poverty level, designation of a hospital district or operators of a public hospital, and the number of nonprofit and for-profit hospitals located in the county. Although this information has been collected by the Texas Department of State Health Services (DSHS), no other analysis has been conducted. ^

Charity care and community benefits by hospital type in Texas

Hospital care is the largest component of the health care sector. This industry is made up of for profit hospital (FPH) organizations, not for profit (NFP) hospitals, and government (GOV) run hospital facilities. Objectives of this analysis were: (a) to conduct a literature review on NFP hospital legislation at the state level in Texas and at the federal level in the broader U.S.; and (b) to describe the types of charity care and community benefits currently being provided: by NFP hospitals compared to FPH hospitals and GOV hospitals; by hospitals geographic proximity to the Texas-Mexico border; and by hospital community type (rural, suburban, and urban); and (c) propose specific policy changes that may be needed to improve the current Texas State statute. Methods. In describing the historical and current policy context of NFP hospital legislation in the United States, federal legislation was reviewed from 1913 to the present and Texas State legislation was reviewed from 1980 to the present. In describing the provision of charity care, data from the 2008 Annual Cooperative Hospital Survey were examined by hospital organizational type, size, proximity to the border, and community type using linear regression and chi-squared tests to assess differences in charity care and community benefits. Results. The data included 123 NFP hospitals, 114 GOV hospitals, and 123 FPH. Results. Small sized (p<0.001) and medium sized (p<0.001) NFP hospitals provide a greater percent of total charity care when compared to FPH hospitals and to both GOV and FPH hospitals respectively; however, no significant difference in total charity care was found among large sized NFP hospitals when compared to FPH hospitals alone (p=.345) and both GOV and FPH facilities (p=.214). The amount of charity care provided was not found to be different based on proximity to the border or community type. Community benefit planning and budgeting was found to be similar regardless of community type and proximity to the border. Conclusion. No differences in charity care in Texas were found for large sized NFP hospitals compared to FPH and GOV hospitals. Contrary to widely held beliefs, this study did not find the border region to provide a greater amount of charity care or bad debt. Charity care also did not vary by community type. These findings underscore the need for continued collection of transparent data from all hospitals in order to provide policy makers and consumers with information on utilization trends to ensure benefits are being provided to the community. Policy changes or revoking tax-benefits may occur as charity care utilization declines with the implementation of health reform in the next few years.^