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Op-Ed: Transparency, Consistency Needed in Not-For-Profit Rules

Image removed.Signs of spring in California: Daylight saving time begins. Hills turn brown. The California Hospital Association goes into war mobilization mode to avoid being held to account on charity care.

Once again, California legislators are considering legislation to establish uniformity and transparency for charity care and community benefit programs -- SB 346, authored by Sen. Bob Wieckowski. Once again, the hospital giants are scrambling to prevent it.

SB 346, like its modest predecessors, is hardly the grave threat posited by the CHA.

It clarifies what counts as charity care -- the direct provision of medical care to the uninsured or underinsured. Writing off uncollected fees based on the absurdly inflated charges set by the big hospitals would not count.

It ensures that community benefit spending meets real needs by addressing the root causes of ill health, such as poor nutrition and unsafe housing, and requires hospital system's health planning committees include representatives of underserved communities and public health departments.

And it requires more transparency through improved reporting so everyone can see whether hospitals meet their obligation for charity care and community benefit, not just using those columns to inflate revenues and profit margins through marketing or cost cutting scams.

Yet, every year the CHA, the fourth deepest pocket in lobbying in Sacramento (it spent more than $6.1 million in lobbying the past two years) runs local hospital executives up to Sacramento to complain that transparency and a level playing field would cause them to collapse. They ignore that according to American Hospital Association data, California hospitals recorded a record $8.7 billion in profits in 2013 and an aggregate of nearly $28 billion in profits from 2009 through 2013.

This year, the CHA has a new gambit, a spoiler bill, AB 1046, to create the appearance that the hospitals want to clean up their dismal record. Predictably, AB 1046 is a smokescreen to pre-empt meaningful reform. While pretending to align California rules with federal standards, AB 1046 cherry picks the federal regulations it likes while dropping the ones it dislikes, notably those that set forth the most accountability.

In their AB 1046, factsheet CHA claims not-for-profit hospitals "reinvest every penny of unspent revenue back into the community." That community apparently includes investment portfolios in the billions of dollars and CEO salaries upwards of $6 million.

Twice in recent years the California state auditor's office has issued reports noting the lack of consistency and uniformity in community benefit programs. Attorney General Kamala Harris (D) recently cited appropriate levels of charity care and community benefit as a condition for the sale of one not-for-profit hospital chain.

California's nurses launched this push to crack down on the abuse because we see every day what happens when daunting medical bills prompt far too many to self-ration care, services are deemed not profitable enough and are ended, and restrictions reduce access to care for the most medically underserved communities. Ensuring that hospitals fulfill their charity care obligations is an important step in the right direction.