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Nonprofits sue California to rescind budget cuts
Sept 22, 2009; CBS News | Nonprofits around the country have reacted in a variety of ways to recent budget reductions and fundraising setbacks. But a group of organizations, led by California Alliance of Child and Family Services (CACFS), has upped the ante by taking its state government to court. The litigation is an effort to stop the planned 10% cut in payments to group homes for foster children, which, the CACFS claims, would violate the U.S. Child Welfare Act.—Timothy Lyster

Hospitals’ charity care under scrutiny nationwide
Sept 21, 2009; Chicago Tribune | NPQ Newswire readers know that we have already referenced the compromise health care reform bill put forward by Montana Senator Max Baucus. One provision would let nonprofit hospitals off the hook on charity care, eliminating a 5% minimum charity care standard in favor of some undefined “community benefit” commitment by the hospital sector. The Chicago Tribune notes, as we did, that Baucus got the support of his Republican counterpart at the Senate Finance Committee, Iowa’s Charles Grassley, to drop the charity care percentage, which was a surprise given Grassley’s long tradition of skewering nonprofit hospitals for looking less nonprofit than their for-profit counterparts. The Tribune mentioned, however, that Grassley does have a pending inquiry into the University of Chicago Medical Center for its “Urban Health Initiative” which moves patients with ostensibly “less severe illnesses and injuries” from the U of C emergency room and shuttles them off to other community hospitals and clinics on Chicago’s Southside.  Grassley (along with doctors inside the U of C and a national doctors group) is concerned that perhaps this might be the U of C falling short of delivering health care to its neighboring low-income community. The U of C has had a historically subpar record on charity care as it is, as we’ve written about in past issues of the Cohen Report. The notion of shuttling emergency room patients to other hospitals has particular resonance for this writer. In Jersey City, when this writer was in public office, the nonprofit hospitals there used to physically “tag” poor people in their emergency rooms and make them wait for ambulances to take them to the City’s public hospital. The U of C says that their practice is meant to give a higher level of attention to patients shunted to other medical facilities. We hope that Senator Grassley and Senator Baucus pursue these nonprofit hospital investigations to completion and return to the idea that nonprofit hospitals, maybe all hospitals, should deliver specific targeted minimum percentages of charity care to the millions of people who will be left out of this nation’s less-than-universal post-reform health care coverage.—Rick Cohen

Hospitals watch Provena Covenant Medical Center’s battle with the Illinois Department of Revenue
Sept 20, 2009; Chicago Tribune | Some might think this case is like the Minnesota one which questioned how much reduced or free care a nonprofit day care center had to offer in order to keep its nonprofit property tax exemption. In Illinois, the state’s supreme court is evaluating how much charity care the nonprofit Provena Covenant Medical Center, a Catholic hospital, has to offer to maintain its nonprofit tax status and property tax exemption. The hospital says that if it has to pay property taxes, that will mean reduced health care-ostensibly for the poor. The state AG, Lisa Madigan, says in the state’s brief that the hospital “concealed the availability of charity care”, had debt collectors chase poor patients for uncompensated health care services, and gave poor people little or no information on how they might apply for charity care.  The hospital of course denies all and says that its charity care includes making up for Medicaid shortfalls and providing outreach programs for community benefit. The appellate courts, noting Provena’s charity care level of less than 1%, sided with the state. No, a large nonprofit hospital that provides 99% of its service to the non-poor, is different than a community day care center.  Sometimes, difference of size is difference of kind. Large hospitals and large universities may be 501(c)(3)s by federal tax status, but they deserve scrutiny about exactly how nonprofit they really are.—Rick Cohen



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