Not-For-Profit Hospitals Face Increasing Scrutiny From Lawmakers; IRS Report Finds Many Hospitals Spend Less Than 3% Of Revenue On Charity Care

Scrutiny of not-for-profit hospitals' tax exemptions is increasing, as an Internal Revenue Service report found that 45% of not-for-profit hospitals spend 3% or less of their revenue on uncompensated care and as state and federal lawmakers consider imposing restrictions on the hospitals, the Wall Street Journal reports. According to the IRS study -- which involved 487 hospitals -- from 2003 to 2005, nearly a quarter of not-for-profit hospitals spent less than 1% of revenue on charity care and one in five spent 10% or more. The Congressional Budget Office says that not-for-profit hospitals received more than $12 billion in tax breaks in 2002, and a recent CBO analysis of hospitals in five states found that not-for-profits provide only slightly more uncompensated care than for-profit hospitals.