Montana health officials are proposing to oversee and set standards for the charitable contributions that nonprofit hospitals make in their communities each year to justify their access to millions of dollars in tax exemptions.
The proposal is part of a package of legislation that the state Department of Public Health and Human Services will ask lawmakers to approve when they convene in January. It comes two years after a state audit called on the department to play more of a watchdog role and nine months after a KHN investigation found some of Montana’s wealthiest hospitals lag behind state and national averages in community giving.
Montana state Sen. Bob Keenan, a Republican who has questioned whether nonprofit hospitals deserve their charity status, said the proposal is a start that could be expanded on later.
“Transparency is the name of the game here,” Keenan said.
The IRS requires nonprofit hospitals to tally what they spend to “promote health” to benefit “the community as a whole.” How hospitals count such contributions to justify their tax exemptions is opaque and varies widely. National researchers who study community benefits have called for tightening standards for what counts toward the requirement.
Montana is one of the most recent states to consider imposing new rules or increasing oversight of nonprofit hospitals amid questions about whether they pay their fair share. Dr. Vikas Saini, president of the national health care think tank Lown Institute, said that both at a state and local level, people in California are exploring whether to monitor hospital community benefits and enforce new standards. Last year, Oregon initiated a minimum amount that nonprofit hospitals must spend on community benefits. And Massachusetts updated its community benefits guidelines in recent years, pushing hospitals to give more detailed assessments of how the sp …