Legislation Questions Hospitals’ Nonprofit Status

SACRAMENTO, Calif. (AP) — Some of California’s most powerful unions are pressuring nonprofit hospitals to prove that they provide enough charitable care to justify their tax-exempt status.

The California Nurses Association is pushing legislation that would set statewide standards for what hospitals can count as charity care.

Under the bill, a hospital would have to show why it should keep its nonprofit status if revenue exceeds spending by more than 10 percent.

The nurses and other labor groups say the tax benefits the hospitals receive as nonprofits are far larger than the value of their charitable work.

The California Hospital Association says it’s unfair to look solely at a hospital’s costs and revenue. More revenue might be needed in a given year to update facilities or subsidize struggling clinics under the same ownership.

Copyright 2013 The Associated Press.

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