Report: NC nonprofit hospitals falling short on charity care

RALEIGH, N.C. (AP) — Many North Carolina nonprofit hospitals are falling short in treating the poor for free or reduced rates to validate their tax-exempt status, State Treasurer Dale Folwell said Wednesday while highlighting a university report on charity care.

Johns Hopkins University expanded its national analysis on hospital care for low-income residents to focus on North Carolina hospitals with the help of the State Health Plan, which covers medical costs state employees, teachers, retirees and dependents. Folwell's agency oversees the plan.

The report found that the state's largest nonprofit hospital systems received more than $1.8 billion in estimated federal, state and local tax breaks for a 12-month period ending in 2019 or 2020, depending on how a system's finances are accounted. But charity care spending — expenses for which they don't expect to receive payment — for a majority of these systems failed to exceed 60% of the value of the system's tax breaks.

Those that failed to reach that 60% threshold included Duke Health, Vidant Health and Novant Health, according to the report, which examined financial records and information filed with the Centers for Medicare and Medicaid Services. WakeMed exceeded its tax-break value. Of the several dozen nonprofit hospitals in the state, fewer than 25 exceeded their tax exemption values with charity-care spending, the report said.

Nonprofits, which can retain revenues left over after expenses, are supposed to provide significant community benefits to justify their tax status to the IRS, the report said. They can avoid paying property or income taxes, or get reimbursed for state and local sales taxes.

“The question is why should the taxpayers continue to subsidize these nonprofit hospitals?” asked Ge Bai, a professor at the Johns Hopkins Carey...