DOJ: News Release

Bullock Releases Report On Charitable Purposes of Montana’s Hospitals

Report focuses on charity care, foundations and the billing practices of 11 largest hospitals

HELENA – Attorney General Steve Bullock today released a report on the charitable performance of Montana’s 11 largest nonprofit hospitals. The report is titled Montana’s Hospitals: Issues and Facts Related to the Charitable Purposes of Our Hospitals and the Protection of Montana’s Consumers.

Nonprofit hospitals in Montana are granted tax exempt status, a standing that saves them tens of millions of dollars a year. But with this valuable status comes an obligation to provide benefits to the communities they serve.

The Montana Department of Justice, which Bullock heads, is tasked with overseeing not-for-profit corporations within the state. This report is the second annual assessment of the charitable achievements of the 11 largest hospitals in the Montana.

The following hospitals are included in the study: Benefis in Great Falls, Billings Clinic, Bozeman Deaconess, Community Medical Center in Missoula, Holy Rosary in Miles City, Kalispell Regional, Northern Montana in Havre, St. James in Butte, St. Patrick in Missoula, St. Peter in Helena and St. Vincent in Billings.

A cover letter to the report follows.

January 20, 2009

To Whom It May Concern:

Escalating health care costs are a major burden for consumers and businesses alike. With the national economy in recession, the affordability and availability of quality health care and health insurance have become even more pressing throughout our state and nation. As the 61st Legislature meets in Helena, I am pleased to make available this report on Montana’s Hospitals.

In Montana, the Attorney General is responsible both for supervising nonprofit corporations—including hospitals and their foundations—and for protecting consumers who use these hospitals. The following report is an annual assessment of the charitable purposes of the 11 largest nonprofit hospitals and hospital foundations in our state.

All of these nonprofit hospitals enjoy tax exempt status—a status that saves them tens of millions of dollars annually. In order to receive tax exempt status, and as “public benefit” nonprofit corporations under state law, these hospitals have a duty to provide community benefits to areas they serve.

While the IRS has broadly defined what constitutes a “community benefit” under federal tax law, the fundamental duty of nonprofit hospitals is charity care: free or discounted services to those living below or near the federally established poverty level. This report indicates that the total amount of charity care provided by hospitals in Montana has increased by $8 million dollars since the first report was released a year ago. Nonetheless, some hospitals in our state clearly do better than others at providing care to the indigent.

For the first time, the report examines the foundations that Montana’s largest nonprofit hospitals have set up—foundations that hold over $100 million in assets. This year’s report examines how much of the funds donated to the foundations supported programs at the hospital in 2007. Again, some hospital foundations have made more of their charitable donations than others.

This report also looks at the billing and collection practices of Montana’s nonprofit hospitals and the number of unpaid debts that end up in bankruptcy, as well as the average amount of those debts. Unfortunately, many Montana patients still face collection agents and, in some cases, bankruptcy with relatively small debts to hospitals.

I would like to thank Larry White and his team at the University of Montana who dedicated hundreds of hours to completing this report. I encourage you to contact my office with any questions.

Most sincerely,

Steve Bullock
Attorney General

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