Comparing the Community Benefit Spending of CAHs, Other Rural, and Urban Hospitals (FMT Policy Brief #45)

Authors

John A. Gale MS, University of Southern Maine, Muskie School of Public Service, Maine Rural Health Research CenterFollow
Zach T. Croll, University of Southern Maine, Muskie School of Public Service, Maine Rural Health Research CenterFollow
Andrew F. Coburn PhD, University of Southern Maine, Muskie School of Public Service, Maine Rural Health Research CenterFollow
Jamar Croom MS, University of Southern Maine, Muskie School of Public Service

Document Type

Policy Brief

Publication Date

11-2016

Keywords

Rural Hospitals (Flex Program), MRHRC, Cutler Institute, rural, community benefit, finance, hospitals, health policy, critical access hospitals

Abstract

There is increasing focus on the safety net role of tax-exempt hospitals, including Critical Access Hospitals (CAHs), and specifically on their charity care and other community benefit policies and activities. This attention was reflected in the Patient Protection and Affordable Care Act’s (ACA) amendments to the Internal Revenue Service (IRS) tax code which clarified and expanded hospital charity care obligations and community benefit reporting requirements.Researchers from the University of Southern Maine's Flex Monitoring Team examined variations in the types and levels of hospital charity care, other community benefit spending, and community-building activities across Critical Access (CAH), other rural, and urban hospitals.

Key Findings:

• Spending for direct patient care (including charity care, subsidized care, and unreimbursed costs of government-sponsored programs) represents a larger portion of CAH community benefit expenses than for other rural and urban hospitals.
• CAHs report a higher rate of community benefit spending on subsidized health services (1.6 percent) compared to other rural (1.1 percent) and urban (0.9 percent) hospitals.
• Despite interest in counting community building activities as a community benefit, these activities represent less than one percent of all nonprofit hospitals’ total expenditures.
• CAHs in areas with high unemployment and/or lower competition have higher rates of community benefit spending for direct patient care services compared to CAHs in areas with lower unemployment and greater competition.

Comments

The Medicare Rural Hospital Flexibility Program (Flex Program) was created by Congress in 1997, allowing small hospitals to be certified as Critical Access Hospitals (CAHs) and offering grants to States to help implement initiatives to strengthen the rural health care infrastructure. The Flex Program is administered by the Federal Office of Rural Health Policy within the Health Resources Service Administration, US Department of Health and Human Services. The Flex Monitoring Team, which conducts research and evaluation on Flex Program activities, is a consortium of the Rural Health Research Centers at the University of Southern Maine, University of North Carolina-Chapel Hill, and the University of Minnesota. For more information, visit http://www.flexmonitoring.org

Funding Organization

Federal Office of Rural Health Policy (FORHP), Health Resources and Services Administration (HRSA), U.S. Department of Health and Human Services (HHS)

Grant Number

PHS Grant No. U27RH01080

Recommended Citation

Gale J, Croll Z, Coburn A, Croom J. Comparing the Community Benefit Spending of Critical Access, Other Rural, and Urban Hospitals. Portland, ME: Flex Monitoring Team, Maine Rural Health Research Center; November, 2016. Policy Brief #45.