Katheryn Houghton
A former Montana well being division staffer who described himself because the lead creator of laws to scrutinize nonprofit hospitals’ charitable acts mentioned new guidelines implementing the invoice amounted to a hospital “wish list” and that the state wants to return to the drafting board.
The Montana Department of Public Health and Human Services just lately adopted the rules outlining how the state will gather knowledge on nonprofit hospitals’ charitable acts with the objective of finally creating giving requirements. That may embrace benchmarks, similar to how a lot monetary assist hospitals should present sufferers.
The state’s guidelines come greater than 4 years after a legislative audit discovered shortcomings within the well being division’s oversight and greater than a 12 months after Republican Gov. Greg Gianforte signed the regulation.
The purpose is to fill in nationwide oversight gaps that make it arduous to weigh whether or not hospitals do sufficient for sufferers and their communities to earn their tax-exempt standing as charitable organizations.
Brenton Craggs, a former regulatory affairs coordinator for the well being division who mentioned he was the preliminary architect of the 2023 oversight regulation, mentioned the state’s plan caters to the Montana Hospital Association.
“This is basically a wish list of demands from the hospital association,” Craggs mentioned. “They wanted us to be bound to federal standards.”
The largest purple flag, Craggs mentioned, is that the state’s guidelines permit hospitals with working losses an exemption from Montana’s eventual neighborhood profit and monetary help requirements.
“Almost every, if not every, single nonprofit hospital in the state will have operating losses during their fiscal years,” Craggs mentioned.
He additionally mentioned the state ought to guarantee hospitals can’t rely unpaid payments they submitted to debt collectors as a part of uncompensated care they checklist as a profit. As is, Craggs mentioned, a hospital can declare that loss “while simultaneously financially ruining the patient.”
Katy Mack, a spokesperson for the Montana Hospital Association, mentioned components of the oversight as proposed within the regulation and rulemaking course of weren’t workable with federal regulation, accounting practices, or the sustainability of rural hospitals.
“Hospitals are not opposed to reasonable and informed oversight,” Mack mentioned. “Hospitals are opposed to one-size-fits-all rules that force them to divert resources from priorities identified by their community.”
Craggs’ rebuke displays a nationwide pressure between states’ in search of to place checks on nonprofit hospitals and pushback from these hospitals. The debate facilities on whether or not nonprofit hospitals give again their justifiable share.
Nonprofit hospitals should report “community benefits” they supply, similar to companies supplied at a loss or free well being screenings. But federal law doesn’t specify what qualifies or how a lot to provide. Hospitals report their giving inconsistently and, in some instances, rely one thing that’s good for enterprise as a profit.
Montana is among the latest states making an attempt to outline what ought to rely as a profit. Hospitals lobbied against cumbersome oversight from the beginning.
In the well being division’s notice that it had adopted the principles in September, state officers mentioned the 2023 regulation finally restricted the stories it may require nonprofits to submit.
The regulation additionally required the state’s definitions of, and requirements for, neighborhood advantages to align with federal requirements “wherever possible.” The company’s adoption discover mentioned that, whereas it could attempt to stick with these requirements, the division acknowledged that it “may not always be possible.”
Health coverage analysts have mentioned stopping at federal requirements could be meaningless.
“The whole point of the state-level policy is to improve upon what the federal government has not done,” mentioned Christopher Whaley, a well being economist at Brown University who research the enterprise of well being care. “If a state is saying we have to follow what the federal government does, then they’re just going to end up in the same exact place.”
Craggs, who now works as an legal professional for the Montana Office of Public Instruction, filed a letter opposing the state’s guidelines through the public remark interval earlier than they had been adopted. KFF Health News obtained that letter via a data request for the general public feedback concerning the rulemaking.
In an interview, Craggs mentioned he was the well being division’s lead on the oversight laws and that he was faraway from that work after he publicly pushed again towards adjustments the affiliation had proposed throughout a Jan. 25, 2023, legislative listening to.
Jon Ebelt, a well being division spokesperson, mentioned the company didn’t need to remark. He mentioned the state’s discover of its adoption of the principles stands by itself.
According to state lobbying stories, the oversight invoice was among the many affiliation’s watched laws for the 2023 session. The group finally supported the invoice after lawmakers made amendments.
Republican Rep. Bob Keenan, the invoice’s sponsor, mentioned a few of the adjustments had been “draconian.” But Keenan mentioned he finally supported the coverage as amended as a result of he knew it was the results of lengthy negotiations with the affiliation. Lawmakers may make future adjustments, he mentioned.
Craggs mentioned the state’s oversight objective was to create requirements that labored throughout hospitals, large and small. Instead, he mentioned, the state’s exemptions give hospitals a simple out and the company is kicking the can down the street on creating requirements.
Montana missed the regulation’s July deadline to set requirements and the well being division has been vague about what form these requirements may take. Officials have mentioned they should compile years of knowledge to set honest benchmarks and that they’ll start establishing requirements in 2026.
Craggs mentioned previous stories of hospital knowledge are already obtainable for officers to start setting these requirements. But he added the information the state plans to gather from hospitals has too many gaps to supply significant oversight.
In the adoption discover, the state mentioned it should steadiness pursuits. It mentioned the division will even take motion if it seems any hospitals abuse their exemption from giving requirements.
“Many critical access hospitals and rural emergency hospitals operate on very thin margins in remote, rural, and/or frontier areas,” the discover mentioned.
The company mentioned hospitals with losses nonetheless should meet federal guidelines.
KFF Health News is a nationwide newsroom that produces in-depth journalism about well being points and is without doubt one of the core working applications at KFF—an unbiased supply of well being coverage analysis, polling, and journalism. Learn extra about KFF.
USE OUR CONTENT
This story could be republished without cost (details).
