Community Benefit

Foundation Payments for Charity Care Patients

Please Take Note: The information provided does not constitute legal or tax advice. The material is provided for informational/educational purposes only. Please consult with counsel regarding your organization's particular circumstances.

Question: We have a foundation that is organized as a separate corporation. They have designated funds to be used to pay for health care services for patients who cannot afford to pay. The hospital makes requests to the foundation if they have a patient who cannot pay and then the foundation writes a check to the hospital to pay for those services. Does any of this qualify as a community benefit?

Recommendation: We recommend reporting the cost of care given to these patients as financial assistance/charity care. Your organization must offset the total cost of financial assistance by the amount contributed by the foundation since your foundation is a separate corporation.

(November 2015)