OHA sets first hospital community benefit floor
Oregon Health Authority announced the first minimum spending floor for hospital community benefit on Feb. 1, as envisioned by HB 3076 (2019). Each tax-exempt hospital or hospital system in the state will receive a floor for community benefit spending based on their revenues, prior expenditures, financial health, and the needs of the population served.
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Because of differing fiscal years, the first to receive a spending floor is Legacy Health System. Its floor will be approximately $253 million for fiscal year 2022 based on its previous levels of unreimbursed care; its direct spending on the social determinants of health, health equity, and other community benefits; and its operating margin.
“After a long and thoughtful process, we arrived at our first community benefit spending floor, which marks a step forward in Oregon’s health system transformation and transparency efforts,” said Jeremy Vandehey, director of the Office of Health Policy and Analytics. “Our hospital system partners are working to align their community benefit activities with the needs of their communities through the community health needs assessment process. Now with a more transparent system of setting minimum spending expectations we will continue to build towards meeting the unique unmet health needs and health inequities in communities around the state.”
As OHA assigns minimum spending floors to hospitals and health systems throughout the year, each floor assigned will be subject to a 30-day public comment period in which members of the public may review the spending floor and comment. Current spending floor notifications, and information on when other hospitals in the state will be assigned, can be found at https://www.oregon.gov/oha/HPA/ANALYTICS/Pages/Hospital-Reporting.aspx under “Community Benefit Reporting.”
Non-profit hospitals are required to engage in community benefit activities in return for their tax-exempt status. They report on these activities to the IRS and to the state annually. Community benefit generally is defined as programs or activities that hospitals provide in response to identified community needs and incur a financial loss. Examples of community benefit include providing free or discounted care to people living in poverty, conducting education or research to promote community health, or donating funds or services to community groups.
House Bill 3076 (2019) introduced significant changes to hospital community benefit policy. The bill created new standards for financial assistance to patients including increasing the income thresholds for charity care, limited medical debt collection and interest, instituted new data reporting requirements, and introduced a new community benefit minimum spending floor program. Under the spending floor program, the Oregon Health Authority (OHA) must every two years set the minimum amount each hospital must spend on community benefits.
In January, OHA published its community benefit minimum spending floor methodology for hospital fiscal years 2022 and 2023.
More data and background on hospital community benefit reporting is available at https://www.oregon.gov/oha/HPA/ANALYTICS/Pages/Hospital-Reporting.aspx.
This press release was provided by the Oregon Health Authority.