By Consumers for Quality Care, on November 23, 2022
While nonprofit hospitals publicly declare millions in losses in services to Medicare patients as part of the community benefits they provide, they also often claim millions in profits from Medicare, a state report has found.
According to a North Carolina state treasurer’s office report and as reported in Kaiser Health News, the largest hospital system in North Carolina, Atrium Health, declared in 2019 it provided $640 million in services to Medicare patients that were never paid for—the largest “community benefit” the system provided that year. But for the same year that Atrium’s website says it recorded a loss on Medicare, the hospital system claimed $82 million in profits from Medicare and an additional $37.2 million in profits from Medicare Advantage in a federally required financial document.
“There is no transparency, no accountability, and no oversight,” said North Carolina State Treasurer Dale Folwell. “With the hospital cartel, it is always profits over people.”
A 2021 KHN analysis of IRS filings found that nonprofit hospitals sat on more than $283 billion in assets, yet only $19 billion, or 7 percent, went towards charitable care. A report released by the Lown Institute found that 80% of 275 hospital systems across the country spent less on charity care and community benefits than they received in tax breaks.
While hospitals chalk up losses on Medicare to justify charging higher prices to consumers with private insurance, an analysis of more than 100 North Carolina hospitals found that most made profits on Medicare from 2015 to 2020. According to a 2021 study from Rand Corp., hospitals across the U.S. charge private insurers more than what they receive from Medicare for the same services.
The IRS is supposed to monitor nonprofit hospitals to protect taxpayers from fraud and abuse, but the system has major gaps. “The nonprofit hospital systems are getting so big, we need greater transparency,” said Professor Glenn Melnick of the University of Southern California. “Health care is amazingly expensive, and it will bankrupt us if we don’t get it under control.”
Nonprofit hospitals must hold up their end of the bargain when it comes to serving their communities, and lawmakers and regulators must hold them accountable by ensuring greater transparency.