Association of Nonprofit Hospitals' Charitable Activities with Unreimbursed Medicaid Care after Medicaid Expansion

Abstract

Importance: In the United States, nonprofit hospitals receive tax-exempt status with the expectation that they provide a high level of benefit to local communities. Prior work has shown that Medicaid expansion reduced hospital spending on uncompensated care. Objective: To measure the association of tax-exempt hospital spending with community benefit and changes in uncompensated care after Medicaid expansion. Design, Setting, and Participants: This cohort study was performed using a difference-in-differences analysis (ie, a pre-post treatment-control design) to estimate changes in reported charitable categories associated with Medicaid expansion. Data from Internal Revenue Service form 990, Schedule H, tax filings for 2253 tax-exempt hospitals in the United States from 2012 to 2016 were used. Data were analyzed from June to November 2019. Exposure: The proportion of the hospital's tax filing that spanned the period after Medicaid expansion. Main Outcomes and Measures: Hospital-reported spending on uncompensated care, unreimbursed Medicaid expenses, and other community benefit spending categories. Results: Across 2253 hospitals, mean (SD) uncompensated care costs between 2012 and 2016 were $4.20 million ($8.80 million) and unreimbursed Medicaid expenses were $7.60 million ($18.62 million). Compared with tax-exempt hospitals in states that did not expand Medicaid, those in states that did expand Medicaid reported mean reductions in their provision of uncompensated care of .11 million (95% CI, .35 million to .87 million; P