CT hospitals report $1.6 billion in community benefits, but most of that is claims of Medicaid underpayment

Yesterday’s Healthcare Cabinet meeting focused on CT nonprofit hospital community benefit reports to the IRS. Last year, CT hospitals claimed $1.6 billion in community benefits, but over half of that (57%) are claims of Medicaid underpayment. Charity care provided to patients unable to pay for their services constituted 21% of total charity care; health professional education was 15%; subsidized health services (clinical services provided at a loss), research, contributions to community groups, and community health improvement costs were all 3% or less each. Total CT hospital claimed community benefit costs are essentially unchanged over the last three years despite rising total hospital budgets. There was discussion of whether to include Medicaid in the report, as for-profits also claim Medicaid underpayment. Medicare underpayment claims are not allowed in the IRS filing. Only nonprofit hospitals are required under federal law to report on community benefits, so Dempsey (state-owned), Waterbury, Manchester, Rockville and Sharon hospitals were not included in the analysis. State law could require all hospitals to report. Massachusetts requires both hospitals and insurers to report on community benefits.