Comparing the Community Benefit Spending of CAHs, Other Rural, and Urban Hospitals (FMT Policy Brief #45)
Rural Hospitals (Flex Program), MRHRC, Cutler Institute, rural, community benefit, finance, hospitals, health policy, critical access hospitals
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.
- 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.
Federal Office of Rural Health Policy
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.