Georgia’s nonprofit hospitals are raising concerns over new transparency rules that are meant to drive down soaring health care costs but that they say will saddle their facilities with additional expenses.
The new law, which took effect last month, requires nonprofit hospitals to post their top salaries, a list of real estate holdings, numbers revealing the hospital’s profit margin and a slew of other financial information. And if hospitals do not comply, they risk losing access to all non-Medicaid state funding.
Much of the information was already publicly available, just not always easy to find and certainly not all in one place. It can still require a little hunting, though, to find the information on each hospital website.
The state Department of Community Health’s board is working on hammering out the details ahead of a vote set for next month. A public comment period that just ended attracted concerns from hospital officials, two powerful state hospital associations and an accounting firm that represents dozens of tax-exempt hospitals, according to documents obtained from the department.
Much of the criticism centers on what the groups called vague wording that left some of the new requirements open to interpretation and the added strain on small hospital staffs.
“As a system that has invested in improving health in the rural areas of our state, we are very concerned about the impact these rules could have on rural hospitals,” wrote Julie Ellen Windom, vice president of governmental affairs for Navicent Health based in Macon, which has a few rural hospitals in its system.
“While we believe in transparency, such disclosures should be allowed to be accomplished in the least burdensome and least costly way possible,” she continued.
Windom also argued that the kind of documents lawmakers fought to make more accessible to consumers aren’t even the kind of information they tend to rely on when making health care decisions.
William Custer, a professor who studies health care financing at Georgia State University, agrees that most consumers will probably not go to the trouble of analyzing what these documents say about their not-for-profit hospital’s finances.
“On that other hand, though, what this does is simply make the information much more readily available to reporters, for example, and others who may have the time and wherewithal to translate that into information that consumers would use,” Custer said.
The Atlanta Journal-Constitution, for example, has already delved into the documents since they became more available to report on the salaries of hospital CEOs and found one who makes $4.9 million in salary and other benefits.
Custer noted that a major driving force behind Georgia’s new law is a concern that not-for-profit hospitals, which are given a pass on paying taxes as a nod to their service to the community, might actually be “profit-making entities in disguise.” Still, he acknowledged that the job of complying with the rules may be tough on smaller hospitals.
One source of contention is an IRS form called a 990 that nonprofits with tax-exempt status file every year. The problem, Windom with Navicent said, is that not every nonprofit hospital is required to file it.
South Georgia Medical Center in Valdosta, for example, does not file the form because of its organizational structure so the hospital instead fills out a state form used for the rural hospital tax credit program. The form is one page. By comparison, Archbold Memorial Hospital in Thomasville posted all 145 pages of its 990 form online.
Windom at Navicent noted that this requires those who don’t typically file the form to do “extra work” to comply with the new law, putting an added strain on staffers who are already stretched then.
A Georgia Hospital Association survey found that it took hospitals about 80 hours to prepare the information required under the new law, according to a written statement submitted to the state health department.
“This did not only impact large, urban hospital systems,” wrote Keri Conley, the group’s attorney. “Rural hospitals estimated spending an average of 67 hours preparing.”
Rep. Matt Hatchett, a Dublin Republican who pushed for the changes this session, said this week that there could be room for clarification.
As an example, Hatchett said it makes sense to set a threshold for reporting executive salaries. Whereas the law says salaries must be posted for “the ten highest paid administrative positions in the hospital,” the state health department has proposed focusing on salaries that exceed $100,000.
Hatchett said he’s hopeful the additional transparency will raise community awareness about the financial well-being of hospitals benefiting from not-for-profit status.
“We’ve got the little hospitals in the rural parts of the state that are hurting. They’re smaller. They truly need all the help they can get, all the business they can get,” Hatchett said. “But a lot of times their communities don’t know the financial condition of these hospitals.
“On the opposite end, we have hospitals that are doing very well and making lots of money, and people don’t know that either,” Hatchett said.
Maybe that awareness will lead people in rural communities to give their local hospital another look when they need a procedure done, Hatchett said. And as for the hospitals flush with cash, maybe the greater public awareness of a facility’s wealth will one day lead to smaller bills for patients, he said.