Charity Care Characteristics and Expenditures Among US Tax-Exempt Hospitals in 2016

Area of Science:

• Health Services Research
• Public Health Policy
• Healthcare Economics

Background:

• Tax-exempt hospitals in the US are expected to provide community benefits, including charity care.
• Financial Assistance Policies (FAPs) dictate eligibility and coverage for hospital financial aid.
• Variations in FAP content may influence the amount of charity care provided.

Purpose of the Study:

• To analyze the content of FAPs in US tax-exempt hospitals.
• To investigate the association between FAP restrictiveness and charity care spending.
• To identify factors influencing charity care expenditures.

Main Methods:

• Analysis of 2016 IRS tax filings and hospital FAPs from a representative sample of 170 tax-exempt hospitals.
• Characterization of FAP content, including eligibility criteria, service coverage, and discount structures.
• Definition of FAP restrictiveness based on common eligibility requirements.

Main Results:

• FAPs exhibited diverse exclusion criteria, inconsistent service coverage, and varied discount policies.
• Hospitals with restrictive FAPs in Medicaid expansion states had the lowest charity care spending.
• Nonrestrictive hospitals in non-expansion states reported the highest charity care spending.
• Hospital restrictiveness alone did not significantly impact FAP expenses.

Conclusions:

• Standardizing FAP eligibility criteria could enhance charity care and promote equity.
• Effective policy reform must address a broader range of restrictions, charges, and exclusions within FAPs.
• Further research is needed to fully understand the impact of FAP design on community benefit provision.