LDS Hospital's commitment to charity care amounts to more than $7,000 a day, according to figures released Friday by the Mountain West's largest adult acute-care facility.
"By the end of October, LDS Hospital had provided $2,151,000 worth of care to people who were unable to pay," said Gary Wm. Farnes, hospital chief executive officer. "By comparison our property tax liability would amount to approximately $1.5 million a year."The hospital's report was released in the wake of controversy surrounding the tax-exempt status of Utah's not-for-profit hospitals.
The Utah State Tax Commission is preparing new standards that will define tax exemption for the facilities, particularly what constitutes charity care. Some county and state officials believe that if a hospital is making a profit, it should not be granted non-profit, tax-exempt status.
But officials of Intermountain Health Care, which owes several Utah hospitals including LDS, disagree. As ammunition for their battle, they cite a recent Vermont Supreme Court decision on the issue.
Regarding hospital tax exemption, the Vermont court said a hospital is not required to operate at a loss in order to maintain its exempt status.
Not-for-profit hospitals may generate "revenues in excess of their expenses in order to maintain the organization, the criteria being only that such revenues not be passed through to shareholders as profits but put back into operating expenses," the court determined.
By year's end, LDS Hospital will reportedly have revenues in excess of $7 million after expenses. It will have provided more than $2.5 million in charity care, which does not include bad-debt write-offs.
Farnes said LDS Hospital uses its margin to provide charity care, replace obsolete equipment, keep up with medical technology and maintain its physical structure and grounds.
"Charity care represents about 30 percent of the hospital's excess revenues - our bottom line," Farnes said. "We try to find out what our patients are entitled to as far as medical coverage is concerned. That includes Medicare, Medicaid, insurance, veteran's benefits . . . whatever.
"As a business, we are obligated to do at least that much. If the patient simply cannot pay for the services rendered, then those charges are written off as charity. But people are always given the care they need first."
Farnes said a sampling of the charity cases at LDS Hospital includes people who underwent heart surgeries, a gunshot victim, a widow suffering from depression, a student who needed ligament repair, a mother and her premature infant, and a cancer patient.
Others were not eligible for charity care.
"The only exception we've had to make is with liver and heart transplant, and the reason is the tremendous costs involved," Farnes said. "When insurance companies, Medicare, Medicaid and other third-party payers begin to offer reasonable coverage for these procedures, we will be able to moderate our posture somewhat.
"But these procedures have a disproportionate impact, and if we don't have a guarantee of recovering at least some of the cost, we would have to discontinue the programs or curtail other services."