The Montana Department of Public Health and Human Services (DPHHS) is considering new rules to increase state oversight of community benefits and charity care provided by non-profit hospitals. The state is in the process of setting standards on the level and type of community benefits that must be provided in exchange for tax exempt status. The state anticipates adopting the new rules in August.
The proposal defines community benefit as initiatives and activities undertaken by a non-profit hospital, critical access hospital, or rural emergency hospital to improve health in the communities served. The initiatives and activities should not be considered normal for the day-to-day operation of the hospital or as having benefits to the hospital not in line with recommended consumer or population health improvement. The proposal said community benefits could include the following:
- Financial assistance as free or discounted care to uninsured and low-income consumers. This is commonly understood as the unrecovered costs written off by a provider organization that results from providing care to individuals unable to pay for health care services they receive.
- Activities to promote and improve population health.
- Prevention activities.
- Programs to support children and families.
- Programs to increase access to care.
- Medical research likely to directly benefit the community in which the nonprofit hospital, critical access hospital, or rural emergency hospital is located.
- Education and training for health care professionals, workforce development, and other activities and contributions associated with the initiatives being undertaken to benefit the community in which the nonprofit hospital, critical access hospital, or rural emergency hospital is located.
DPHHS plans to establish standards for community benefit and financial assistance by evaluating two years of baseline data using existing data from 2023 to formulate standards after baseline data is validated/aggregated and a three-year average determined. DPHHS will consider the following factors when developing the standards: hospital size, community size and location, net patient revenue (total consumer revenue due to services minus discounts), consumer care expenses, and payer mix. DPHHS may also consider the following: bad debt and community health needs assessments.
The state is considering whether to adopt numerical standards, narrative standards, or a combination for community benefit and financial assistance. The community benefit requirement, including financial assistance, will be set at the beginning of the calendar year. Non-profit hospitals with operating losses will not be required to meet community benefit requirements established under the standards for that year.
In the event that a non-profit critical access hospital or rural emergency hospital fails to adhere to its community benefit policy or financial assistance policy, DPHHS will provide technical assistance and may require corrective action. Non-compliant hospitals may be fined $1,000, and the hospital will have 10 days to take corrective action. After 10 days, if the hospital is still out of compliance, it will be assessed a fine of $5,000 per month until the hospital comes back into compliance.
For more information, contact: Jon Ebelt, Public Information Officer, Montana Department of Public Health and Human Services, 111 North Sanders, Room 301, Helena, Montana 59620; 406-444-0936; Email: jebelt@mt.gov; Website: https://mt.gov/