The California Nurses Association/National Nurses United today called on California Attorney General Kamala Harris to reject a request by St. Agnes Medical Center (SAMC) in Fresno to reduce the amount of its charity care and community benefit.

St. Agnes is seeking to slash its requirement to meet the level of charity care services and community benefit programs set by the Attorney General’s office as part of the 2013 approval of a consolidation agreement of Trinity Health, St. Agnes’ corporate parent, with Catholic Health East.

The hospital is basing its request on what CNA views as an absurd claim that there is less need to provide charity care today as a result of the Affordable Care Act which results in a “change in conditions” that “could not have reasonably been forseen at the time of the Attorney General’s action” – despite the fact that the 2013 ruling came three years after passage of the ACA.

In a letter today to Harris and Deputy Attorney General Wendy Horwitz, CNA strongly objected to the request, and voiced its concern over a “trend represented in recent Attorney General decisions” involving hospital mergers, notably the recent “uncritical acceptance” of an “unnecessary merger” of two other large Catholic hospital systems, St. Joseph Health and Providence Health and Services.

“There are still millions of individuals not covered by the ACA or eligible for Medical/Medicare. There are also millions of individuals who are covered either by Medical/Medicare or private insurance plans who also have unreasonably high co-pays and/or deductibles, as well as, doctors and/or procedures covered by such plans or Medical/Medicare,” wrote CNA legislative director Don Nielsen.

“Charity care and community benefit represent a vital opportunity to address health disparities, particularly in disadvantaged regions across the San Joaquin Valley,” said Nielsen.

A March analysis by the Greenlining Institute of 11 not-for-profit hospitals in the San Joaquin Valley, including St. Agnes, Nielsen noted, found “serious inconsistency and lack of transparency, particularly in SAMC’s reporting of its community benefit programs, including its charity care spending.”

“The Attorney General must not allow SAMC easily to shirk it responsibilities in this area,” the letter concludes.

“Charity care is a gift taxpayers provide not-for-profit hospitals who reap an enormous revenue windfall as a result of their tax-exempt status,” said CNA Co-president Malinda Markowitz, RN.

“Yet we have seen widespread abuse by hospitals across California, many of which provide only bare bones levels of charity care and community benefit services while patients and families endure inflated medical bills that put their health and economic security in danger,” Markowitz said. “The effort by St. Agnes to further reduce its level of charity care would severely punish Central Valley residents who are in such great need of health care services.”

An extensive 2012 CNA study found California hospitals harvest more than $1.8 billion in government subsidies and benefits from their tax-exempt status beyond what they provide in charity care. Public subsidies include exemptions from federal and state income taxes, property and sales taxes, tax benefits from charitable donations, and tax exempt bond status.  

CNA has in recent years sponsored legislation to crack down on the widespread abuse of the charity care/community benefit system with strengthened obligations but the bills have failed to pass the state legislature due to massive lobbying by the multi-billion dollar hospital industry.

“With the failure of the legislature to act, it becomes even more important for the Attorney General to stand up for patients and hold these hospital corporations accountable for meeting even the current minimal level of charity care services,” said Markowitz.