If you're a nonprofit hospital or health system leader, it may seem that no matter what you do to benefit your community, someone's always pointing out your shortcomings and how you could do more. Some examples are more egregious than others, of course.
Much of this bad publicity surrounds efforts promoting healthcare access and finance for the most vulnerable people in the community. Time magazine may have just discovered this problem, but we and others in the trade press have documented over the years instances when nonprofit hospitals and health systems have gotten into trouble with their nonprofit status.
Most often, it's because some of them have aggressively pursued payment from the so-called "self-pay" population after charging them full price for services, that is, without the benefit of discounts available to government or commercial payers. Those problems have been addressed by many as hospitals and health systems have built detailed financial assistance policies, but nonprofit status must continually be justified as the healthcare marketplace undergoes dramatic change.
The IRS has instituted new rules regarding community benefit reporting, although many see it as an information-gathering exercise to develop more precise rules on what hospitals and health systems need to do to justify their nonprofit status in the future. The PPACA itself contained several provisions concerning tax exemption.
Yet still hospitals tend to get themselves in trouble. Just last year, a CEO ultimately lost his job after efforts to collect on such patients that got out of hand.