Cleveland Clinic said it provided $497 million in “community benefit” last year — the largest amount it has ever reported.
Community benefit is a somewhat controversial and imprecisely defined term that can include charity care, Medicaid and Medicare shortfalls and bad debt. Hospitals are required by the federal government to provide community benefit in order to justify their tax-exempt status. Better defining the term has become a pet issue for Sen. Charles Grassley, an Iowa Republican.
For the Clinic, the largest components of its community benefit last year included education ($176 million), charity care ($120 million) and Medicaid shortfall ($79 million), according to a statement. In 2008, the health system provided a benefit of $436.1 million, according to its Community Connections report (pdf) for that year.
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The Clinic said since 2004, it’s defined community benefit using guidelines from the Catholic Health Association (CHA). The Internal Revenue Service has adopted the same CHA standards for nonprofit hospital filings with the agency.
“Variations in the activities nonprofit hospitals define as community benefit lead to substantial differences in the amount of community benefits they report,” the Government Accountability Office reported in 2008.
