Montana Hospitals

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 largest nonprofit hospitals and foundations in our state. Beginning in 2010, the report began examining  smaller, critical access hospitals in the state.

All of these 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.

On August 16, 2012, the Attorney General’s Office released the fifth hospital report — showing that, among other things, applications for charity care have steadily increased, even as approval rate to receive charity care has dropped. Yet hospital spending on charity care is up 70 percent in inflation-adjusted dollars since 2006. The 2012 report examines 10 large Montana hospitals and 12 smaller hospitals, as well as hospital foundations.

About the Montana Hospitals Survey

The Montana Attorney General’s Office is charged with protecting consumers from unfair trade practices. The office is also responsible for supervising nonprofit corporations in the state, including all major Montana hospitals. Under the hospitals’ tax-exempt status, they receive millions of dollars in tax benefits from federal, state and local governments in return for the charity care and community benefits they provide.

In September 2006, the Attorney General’s Office began surveying hospital policies in three areas:

  • pricing policies, including variations related to insurance coverage,
  • charity care policies and practices, and
  • debt collection practices.

The wealth of information provided by Montana’s hospitals was analyzed by Lawrence White, a research assistant professor with the School of Public and Community Health Sciences at the University of Montana and former CEO of St. Patrick Hospital in Missoula.

White’s reports provide an independent analysis of the data collected.

Read the Reports Online

Copies of each report are available for download below.

Great Falls Hospital Merger

Under Montana law, health care facilities that wish to merge must apply for a certificate of public advantage (COPA) if they wish to be immune from federal antitrust laws. The Department of Justice is responsible for reviewing proposed mergers and either granting or denying the merger and supervising the merged entity in accordance with Section 50-4-603of the Montana Code Annotated.The department reviews three factors – health care costs, access to health care services and quality of health care services – in its consideration of proposed mergers. If a proposed merger results in lower health care costs, improved access to health care or greater quality of care than would occur without a merger, the department must issue a certificate. If the criteria are not met, the department must deny the merger application.The department is also authorized to impose specific conditions on a COPA to guard against any potential abuse of power resulting from reduced competition and to ensure the objectives of the merger are met.Termination Date – Through Senate Bill 323 (PDF), the 2007 Legislature amended the law by providing that:

  • a certificate of public advantage must terminate 10 years from the date it was issued, and
  • for two years immediately following the termination of a COPA, the prior certificate holder must file an annual report with the department.

These amendments were applied retroactively to the Great Falls Hospital merger, thereby terminating the 1996 COPA on July 9, 2006.

In October 1995, Great Falls’ Montana Deaconess Medical Center and Columbus Hospital proposed a merger and in July 1996, the Department of Justice issued the COPA. The order allowing the merger and significant documents related to the post-merger supervision are available below.