Researchers: Many Hospitals Are Just Checking Community Benefit Box on IRS Forms

On Aug. 24, The Journal of the American Medical Association (JAMA) published an article by Leo Lopez III, M.D., Meera Dhodapkar, and Cary P. Gross, M.D., entitled, “U.S. Nonprofit Hospitals’ Community Health Needs Assessments and Implementation Strategies in the Era of the Patient Protection and Affordable Care Act.”

On that same day, Lopez and Gross contributed an opinion article to The Hill, writing that “Tax exemptions are estimated to save nonprofit hospitals over $24 billion annually. In return, the hospitals are expected to invest these would-be tax dollars into caring for underserved patients (“charity care”) and improving the health of their communities. In order to maintain their nonprofit status, Congress requires hospitals to rigorously examine [the needs of] communities with a formal Community Health Needs Assessment (CHNA) and document how they are addressing those needs with an implementation strategy. Rather than making these responsibilities central to their mission, our recent work suggests many hospitals are simply checking the CHNA box on their IRS forms and mailing them in.”

The authors of the JAMA study write that “These rules [from the Patient Protection and Affordable Care Act (ACA)] mandated that all nonprofit hospitals (1) conduct a triennial community health needs assessment (CHNA) and adopt an implementation strategy, (2) abide by specific documentation requirements, and (3) make these documents publicly available. This cross-sectional study examines US nonprofit hospitals’ adherence to these requirements during the ACA era.”

Key results from the authors’ findings include:

• Four hundred ninety-five (99 percent) [out of 500 hospitals] reported on their Internal Revenue Service 990 form that they had conducted a CHNA
• Four hundred twelve (84 percent) of these CHNAs were identified online
• Four hundred ninety-one hospitals (99 percent) reported that they adopted an implementation strategy
• Three hundred thirty-one of these (75 percent) were identified on their website
• In aggregate, 229 (60 percent) of the hospitals in our sample had both a CHNA and corresponding implementation strategy that could be found online
• The 412 CHNAs had a mean quality score of 3.2 of 5, consistent with partial detail
• Many were missing the required documentation elements:
• One hundred seventy-four CHNAs (42.2 percent) did not include an evaluation of impact description
• One hundred one (25 percent) did not describe the resources available to address the health needs they identified
• The 331 implementation strategies had a mean quality score of 3.2 of 5
• One hundred thirty-six (41 percent) were rated as solid-high quality (score 4 or 5 of 5)

That said, “This cross-sectional study found that since the passage of the ACA’s CHNA and implementation strategy regulations, most hospitals reported that they are conducting CHNAs and adopting related implementation strategies. However, only 60.0 percent of the hospitals in our sample had both a CHNA report and an implementation strategy on their website, and many of the documents were missing the required documentation elements.”

In the article from The Hill, Lopez and Gross say the federal government should develop a community health investment standard that ensures hospitals’ tax benefits are acceptable. “Policymakers can learn from The Lown Institute’s Hospital Index,” Lopez and Gross write. “The publicly available index provides an analysis of over 3,000 hospitals nationwide and compares their tax benefits against their community benefit spending. Using such a system, the government could determine which hospitals are paying their fair share in community health investments and base tax incentives and penalties accordingly.”

Lopez and Gross don’t gloss over the pandemic, though. They say that during a public health emergency the focus should be on saving lives, not administrative obligations. Yet, they conclude that “If hospitals expect to maintain their tax-exempt status, it's time they start delivering on their commitments to the public.”