.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} At any time, up to 180 homeless women and children receive free shelter, meals and medical care at House of Mercy in Des Moines, which operates four transitional housing programs for women with drug addictions from across the state. Mercy doctors see between 500 and 600 patients a month at the facility’s free on-site clinic.

With a $5 million annual operating budget, the hospital-supported shelter provides about $400,000 worth of free medical care each year, in addition to dispensing tens of thousands of dollars worth of prescription drugs at no charge each month.

The program represents one slice of the tens of millions in dollars in uncompensated care that Central Iowa nonprofit hospitals provide annually.

“Looking at the medical piece, I wouldn’t be able to put a dollar amount on the savings to the community to keeping people out of the emergency rooms, keeping people healthy so they don’t have to be continually seen for crisis-type acute matters,” said Todd Beveridge, House of Mercy’s director.

It’s a much different picture across the country for many nonprofit hospital systems, according to Sen. Charles Grassley. The ranking Republican on the Senate Finance Committee, Grassley says many of the tax-exempt institutions are failing to live up to their mandate to provide sufficient free or low-cost care for patients who otherwise can’t afford medical treatment. Grassley is now asking hospitals to justify why they shouldn’t be subject to legislation that would mandate minimum levels of charity care and impose sanctions for not meeting those standards.

Grassley is recommending that hospitals’ uncompensated care, as measured by the sum of charity care provided and bad-debt expense incurred, should equal at least 5 percent of their total operating revenues or expenses, whichever is greater. The staff report also recommends that hospitals that don’t meet that standard should have to pay an excise tax equaling at least twice the shortfall.

Representatives of Greater Des Moines’ two private nonprofit hospital systems, however, say hospitals such as theirs that are doing a good job in providing charity care shouldn’t be penalized by imposing arbitrary standards. Both Iowa Health – Des Moines and Mercy Medical Center officials say their hospitals have instituted well-publicized programs to provide financial assistance to those who need it, and that community programs such as the House of Mercy and La Clinica Medica are providing outreach to the region’s most vulnerable residents.

“I think the measurement should be, if I come in your emergency department and I need economic assistance and I need care, will I get it?” said Joe LeValley, Mercy’s senior vice president for planning and system development. “When the answer to that is ‘yes,’ it shouldn’t matter if people come in 10,000 times a day or 10 times a day, as long as when they come in, the answer is, ‘Yes, we’ll help you.’ That’s what matters.”

Mercy provided charity care totaling $9.7 million in fiscal 2006, which represented about one-third of the approximately $30 million it calculates as the total community benefit it provided through non-billed clinical services, unpaid costs of Medicaid and programs such as House of Mercy.

Iowa Health – Des Moines, which operates Iowa Lutheran Hospital, Iowa Methodist Medical Center and Blank Children’s Hospital, provided $8.06 million in charity care in fiscal 2006, as part of uncompensated care it estimates at $26.58 million.

Grassley pointed to the sizable tax breaks that U.S. hospitals receive as a reason for tightening the requirements for charity care. Estimates by the Congressional Budget Office valued tax breaks for all U.S. nonprofit hospitals at more than $12 billion in 2002, the latest year for which data was available.

In Polk County, the value of tax-exempt hospital property totals more than $320 million, which represents 21 percent of the $1.55 billion of value in all exempt properties in the county.

Grassley said he is not yet recommending legislation and is soliciting comments from hospitals.

The IRS report released in July indicates that 45 percent of the 472 nonprofit private hospitals responding to a national survey provided uncompensated care that was 3 percent or less of their total revenues. Fourteen percent said their charity care totaled between 3 and 5 percent of revenues. Another 40 percent indicated charity care ranged from 5 percent to 50 percent of revenues, while 1 percent said charity-care costs exceeded 50 percent of revenues.

“This report makes it clear that we need to change business as usual at many of our nation’s nonprofit hospitals,” Grassley said in a press release. Noting that the hospitals’ self-reported numbers often included inflated costs or charges for bad debt, he said, “It’s troubling that even the overly broad figures paint a bad picture of a significant number of nonprofit hospitals doing very little charity care.”

Mercy’s LeValley, however, said creating a revenue-based mandate is problematic at best.

“One year a hospital may meet its charitable goal, and the next year unemployment goes down, the community has a better economic year and the hospital has a better financial year,” he said. “With that combination, now they don’t meet the standard. So are you going to punish a hospital because their community has lower unemployment and it’s having a better economic year?”

Both Mercy and Iowa Health officials say they support more transparency by hospitals in reporting their charity-care data. Each has adopted a model developed by the Catholic Health Association of America, which they say provides a more conservative estimate because it doesn’t include bad debt expense.

“We are now more standardized than we have ever been,” said Procter Lureman, a spokesman for Iowa Health System, parent company of Iowa Health – Des Moines. That reporting system, which does not include bad-debt expense or Medicare costs but does account for Medicaid costs, has been acknowledged by Grassley’s office as an improvement over the current method, he said.

Collectively, Iowa’s hospitals come close to meeting the 5 percent threshold. In its annual community benefits survey, the Iowa Hospital Association reported that its 117 member hospitals provided uncompensated care valued at more than $465 million in 2005, counting both the cost of charity care and bad-debt expenses for care provided. That equates to 4.3 percent of the $10.8 billion in gross patient revenues received, according to Scott McIntyre, an IHA spokesman.

“In Iowa, most people have a medical home and a primary physician and they are insured, so we don’t see nearly the impact there is in other states,” McIntyre said. He added that uncompensated care is just a portion of the total community benefit that hospitals provide. In 2005, Iowa hospitals provided more than $39 million in reduced-fee or free programs and services.

Taking a proactive stance to assisting low-income patients by providing community programs such as Iowa Health’s La Clinica Medica “makes a whole lot more sense” than relying on emergency medical services or allowing bad debt to mount, said Sid Ramsey, vice president of strategic business development and marketing for Iowa Health – Des Moines.

Counting all of its community programs, Iowa Health – Des Moines serves approximately 84,000 low-income people a year in charity care services such as La Clinica Medica.

“I think anything that we can do that provides greater access to clinical care to keep people healthy, should be included in [what is credited to hospitals’] community benefit,” Ramsey said.