A systematic method of accountability. Sound policies allow facilities to account for the level of charity care they provide.
Charity care policies can help hospitals accurately determine, define, and account for the level of charity care they provide. This information will help hospitals budget appropriately and measure trends that will ultimately affect the organization's viability. State governments, the federal government, and the Internal Revenue Service are more closely scrutinizing not-for-profit hospitals' tax-exempt status. As a result, the American Institute of Certified Public Accountants (AICPA) has revised its requirement to report on charity care. To meet the AICPA's requirement, healthcare providers must develop their own definition of charity and determine criteria for providing care free or at a reduced rate. Setting policies to support the organization's definition of charity is necessary for the development of internal systems that promote the early identification of individuals seeking healthcare who will be unable to pay for services. Several policy implications may result from the facility's charity care determination process. For example, patients exhibiting extreme hardship might still be eligible to receive charity care even though their income and assets exceed the hospital's income guidelines. An organization planning to develop a charity care policy must first thoroughly assess its current charity care practices and cost accounting capabilities. Obtaining input from all the departments involved in the development of the charity care policy is necessary to make the transition as smooth as possible.
School of Public Health, St. Louis University.
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D002017:Budgets; D002608:Charities / Q000191:economics*; D003159:Community-Institutional Relations / Q000191:economics*; D003361:Cost Allocation; D006751:Hospital Information Systems; D006788:Hospitals, Voluntary / Q000191:economics* / Q000331:legislation & jurisprudence / Q000458:organization & administration; D007182:Income; D008489:Medical Indigency; D016134:Organizational Policy; D010350:Patient Credit and Collection; D011203:Poverty; D012941:Social Responsibility; D013660:Taxes / Q000331:legislation & jurisprudence; D014481:United States