Internal Revenue Service continues to let most U.S. hospitals pay nothing in federal taxes.
It’s time for Congress to take a hard look
at the IRS’s hand in health care.
The agency uses a vague “community benefit” standard to liberally grant tax-exempt status to so-called nonprofit hospitals even as many of them are financially taking advantage of sick Americans with inflated medical bills. Several of my Johns Hopkins colleagues and I published a study in the Journal of the American Medical Association showing that some nonprofit hospitals sue and garnish the wages of low-income patients who can’t afford to pay their medical bills.
Where’s the community benefit in that? Nonprofit hospitals are supposed to be compassionate and merciful, not predatory and ruthless.
Many hospitals force people who are suffering and seeking care in earnest to sign their financial life away as a condition of treatment. Some make contesting a bill difficult and others do not comply with the federal hospital transparency rule which requires hospitals to post prices for common shoppable services.
The most recent money game that nonprofit hospitals are dialing up is adding billions of dollars in “facility fees” for routine care.
These billing tricks are fleecing everyday Americans.
Congress could make them disappear overnight if it passed a law disqualifying hospitals that use them from getting the coveted tax-exempt benefit.
Many tax-exempt hospitals argue that they provide millions of dollars in free care. But here’s what’s really going on: Much of what they call free care is emergency care that hospitals are required to provide by law (the 1986 Emergency Medical Treatment and Labor Act requires hospitals to care for anyone who walks in with an emergent condition). But after the care has been provided, patients are often hounded for payment, often at an artificially inflated price.
Hospitals then report the difference between their high sticker price and what they actually collect after shaking down a patient
as charity care.
But the way taxes work, businesses are taxed only on their profits. Some hospitals hide their profits in cost-shift accounting and loan refinancing, even engaging in aggressive real estate and venture capital investing. According to public tax records, Cedars Sinai in Beverly Hills had an income surplus of $750 million in 2022 and paid no federal taxes.
Memorial Sloan Kettering Cancer Center in New York had $400 million and also paid no federal taxes. The top three hospital
administrators there made nearly $20 million in salaries.
Chronic diseases are the leading cause of death in the U.S. and consume a majority of the $4.5 trillion Americans spend on health care. The current Whac-a-Mole system isn’t working. Most American adults take 4 or more prescription medications regularly, making the U.S. the most medicated population in the world. The country needs to try new approaches to health.
Instead of scolding Americans who sign up for direct primary care or want to eat healthier foods, the IRS should hold hospitals
accountable for the taxes they should be paying.”
Excuse me? Then they pass that cost on to me? No thank you
3 comments
Internal Revenue Service continues to let most U.S. hospitals pay nothing in federal taxes.
It’s time for Congress to take a hard look
at the IRS’s hand in health care.
The agency uses a vague “community benefit” standard to liberally grant tax-exempt status to so-called nonprofit hospitals even as many of them are financially taking advantage of sick Americans with inflated medical bills. Several of my Johns Hopkins colleagues and I published a study in the Journal of the American Medical Association showing that some nonprofit hospitals sue and garnish the wages of low-income patients who can’t afford to pay their medical bills.
Where’s the community benefit in that? Nonprofit hospitals are supposed to be compassionate and merciful, not predatory and ruthless.
Many hospitals force people who are suffering and seeking care in earnest to sign their financial life away as a condition of treatment. Some make contesting a bill difficult and others do not comply with the federal hospital transparency rule which requires hospitals to post prices for common shoppable services.
The most recent money game that nonprofit hospitals are dialing up is adding billions of dollars in “facility fees” for routine care.
These billing tricks are fleecing everyday Americans.
Congress could make them disappear overnight if it passed a law disqualifying hospitals that use them from getting the coveted tax-exempt benefit.
Many tax-exempt hospitals argue that they provide millions of dollars in free care. But here’s what’s really going on: Much of what they call free care is emergency care that hospitals are required to provide by law (the 1986 Emergency Medical Treatment and Labor Act requires hospitals to care for anyone who walks in with an emergent condition). But after the care has been provided, patients are often hounded for payment, often at an artificially inflated price.
Hospitals then report the difference between their high sticker price and what they actually collect after shaking down a patient
as charity care.
But the way taxes work, businesses are taxed only on their profits. Some hospitals hide their profits in cost-shift accounting and loan refinancing, even engaging in aggressive real estate and venture capital investing. According to public tax records, Cedars Sinai in Beverly Hills had an income surplus of $750 million in 2022 and paid no federal taxes.
Memorial Sloan Kettering Cancer Center in New York had $400 million and also paid no federal taxes. The top three hospital
administrators there made nearly $20 million in salaries.
Chronic diseases are the leading cause of death in the U.S. and consume a majority of the $4.5 trillion Americans spend on health care. The current Whac-a-Mole system isn’t working. Most American adults take 4 or more prescription medications regularly, making the U.S. the most medicated population in the world. The country needs to try new approaches to health.
Instead of scolding Americans who sign up for direct primary care or want to eat healthier foods, the IRS should hold hospitals
accountable for the taxes they should be paying.”
Excuse me? Then they pass that cost on to me? No thank you
Let’s start with Churches