Comparison of Community Benefit Spending Reported to the Massachusetts Attorney State General’s Office and the Internal Revenue Service

2020
Research Category: Health Sciences
Presenter: Xiang-Zuo Pan
Additional Authors: Geri Cramer

Background

A large portion of hospitals in the United States file as nonprofit organizations to the IRS. Tax exemptions, estimated to total over 24 billion dollars annually, are granted to these hospitals because they are considered charitable organizations. In return, nonprofit hospitals are expected to spend a portion of their earnings towards the benefit of their community’s health. Nonprofit hospitals are required to periodically complete Community Health Needs Assessments and provide spending reports annually to the IRS in Schedule H form 990 . Certain states require their own expenditure reports as well. Both attempt to quantify contributions to improve community health. This study will compare community benefit spending reported to the IRS and that to the Attorney General’s Office (AGO).

Objective

To evaluate current methods for quantifying and reporting community benefit spending in the state of Massachusetts

Methods

Hospital expenditure reports were publicly available. The Massachusetts AGO reports were available on the Massachusetts State Government website. Individual hospital schedule H 990 forms were taken from third party websites, which extrapolated publicly available IRS data forms.

Discussion

The results from this study will show trends between spending reports submitted to the Massachusetts State AGO and the IRS. Findings of consistent differences between reports will highlight conflicts in defining community benefit spending. Analysis will explain why these exist and guide future evaluation methods.

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