Bullock Releases Annual Report on Charitable Purposes of Montana’s Hospitals
HELENA – Attorney General Steve Bullock today released the third annual report on the charitable performance of Montana’s nonprofit hospitals. The report examines the 11 largest hospitals in the state and, for the first time this year, 11 smaller, critical access facilities.
The report, titled Montana’s Hospitals: Issues and facts related to the charitable purposes of our hospitals and the protection of Montana’s consumers, is available online along with a cover letter from Attorney General Bullock (pasted below) and an overview of the findings of the report:
- Montana’s Hospitals
- Attorney General Bullock’s cover letter
- Overview of 3rd annual Montana’s Hospitals report
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 oversees nonprofit corporations in the state. This report is the third annual assessment of the charitable achievements of hospitals in Montana.
In September 2006, the Attorney General’s Office began surveying pricing policies, including variations related to insurance coverage; charity care policies and practices; and, debt collection practices.
We are no stranger to tough times. Older Montanans survived the Great Depression and younger ones are relearning the same hard lessons as they struggle to find work, afford housing and raise families in these challenging economic times. Rising health care costs continue to take a greater proportion of wages, causing many Montana families to cut back on care and worry about being able to afford health insurance and the cost of catastrophic illness.
Against this backdrop, my office, in cooperation with the School of Public and Community Health Sciences at The University of Montana, makes the third annual Montana’s Hospitals report available to consumers throughout the state.
In Montana, the Attorney General is responsible both for monitoring nonprofit corporations and for protecting the interests of those served by a nonprofit corporation. Thus, the Attorney General is responsible for monitoring nonprofit hospitals and their foundations, and ensuring that the hospitals are fulfilling their charitable obligations.
The report is an annual assessment of the charitable purposes of the 11 largest nonprofit hospitals and foundations in our state. For the first time, this year’s report also includes information about 11 smaller, critical access hospitals in Montana.
All of these 22 nonprofit hospitals are public benefit corporations under Montana law. They exist only to serve their communities, not to make money. Because of this, they have been given tax exempt status — a status that saves them tens of millions of dollars annually. These hospitals have a duty to provide community benefits to the areas they serve. Charity care — free or discounted services to those living below or near the federally established poverty level — is the most significant community benefit nonprofit hospitals provide. It is in the interest of all hospitals to ensure that all qualified patients are provided charity care rather than incurring bad debts.
As this third report shows, charity care is increasing in Montana, although it still varies widely across hospitals.The 11 large hospitals have increased charity care significantly over the past three years, from a median 1.57% of their budgets in 2006 to 2.43% of their budgets in 2008.In 2008, the four hospitals that provided the greatest amount of charity care as a percent of their operating expenses were St. James in Butte, Billings Clinic, St. Patrick in Missoula, and Benefis in Great Falls. See Tables 5(A) & (B).
As one would expect, the hospitals that provided the greatest share of charity care are those with the most generous charity care policies, which is reflected in the income level at which people are eligible for charity care. Montana’s smaller hospitals, studied for the first time this year, show a lower level of charity care overall and even more variation in charity care policies. See Tables 2 & 3.
Traditional charity care now amounts to only a fraction of a hospital’s total community benefits. Hospitals need to ensure that less specific community benefits are not displacing direct charity care. By explaining how other forms of “community benefit” fulfill their public benefit mission, hospitals could also encourage community interest groups to assess whether their local hospitals are providing the “community benefits” that are wanted or needed in a particular community.
This year’s report also notes that it is still too hard for patients to understand hospital pricing, which varies widely across similar services. Additionally, some hospitals could better ensure that their supporting foundations make the most of dollars contributed by their communities.
Again this year, I would like to express my thanks to Larry White and his team for pulling together the statistical data that we hope will help consumers gain a greater understanding of hospital care in Montana.