Tex.
Health & Safety Code Section 311.045
Community Benefits and Charity Care Requirements
(a)
A nonprofit hospital or hospital system shall annually satisfy the requirements of this subchapter and of Sections 11.18 (Charitable Organizations)(d)(1), 151.310 (Religious, Educational, and Public Service Organizations)(a)(2) and (e), and 171.063 (Exemption-nonprofit Corporation Exempt from Federal Income Tax)(a)(1), Tax Code, to provide community benefits which include charity care and government-sponsored indigent health care by complying with one or more of the standards set forth in Subsection (b). The hospital or hospital system shall file a statement with the Center for Health Statistics at the department and the chief appraiser of the local appraisal district no later than the 120th day after the hospital’s or hospital system’s fiscal year ends, stating which of the standards in Subsection (b) have been satisfied, provided, however, that the first report shall be filed no later than the 120th day after the end of the hospital’s or hospital system’s fiscal year ending during 1994. For hospitals in a hospital system, the corporate parent may elect to satisfy the charity care requirements of this subchapter for each of the hospitals within the system on a consolidated basis.(b)
(1) A nonprofit hospital or hospital system may elect to provide community benefits, which include charity care and government-sponsored indigent health care, according to any of the following standards:(A)
charity care and government-sponsored indigent health care are provided at a level which is reasonable in relation to the community needs, as determined through the community needs assessment, the available resources of the hospital or hospital system, and the tax-exempt benefits received by the hospital or hospital system;(B)
charity care and government-sponsored indigent health care are provided in an amount equal to at least 100 percent of the hospital’s or hospital system’s tax-exempt benefits, excluding federal income tax; or(C)
charity care and community benefits are provided in a combined amount equal to at least five percent of the hospital’s or hospital system’s net patient revenue, provided that charity care and government-sponsored indigent health care are provided in an amount equal to at least four percent of net patient revenue.(2)
For purposes of satisfying Subdivision (1)(C), a hospital or hospital system may not change its existing fiscal year unless the hospital or hospital system changes its ownership or corporate structure as a result of a sale or merger.(3)
A nonprofit hospital that has been designated as a disproportionate share hospital under the state Medicaid program in the current fiscal year or in either of the previous two fiscal years shall be considered to have provided a reasonable amount of charity care and government-sponsored indigent health care and shall be deemed in compliance with the standards in this subsection.(c)
The providing of charity care and government-sponsored indigent health care in accordance with Subsection (b)(1)(A) shall be guided by the prudent business judgment of the hospital which will ultimately determine the appropriate level of charity care and government-sponsored indigent health care based on the community needs, the available resources of the hospital, the tax-exempt benefits received by the hospital, and other factors that may be unique to the hospital, such as the hospital’s volume of Medicare and Medicaid patients. These criteria shall not be determinative factors, but shall be guidelines contributing to the hospital’s decision, along with other factors which may be unique to the hospital. The standards set forth in Subsections (b)(1)(B) and (b)(1)(C) shall also not be considered determinative of the amount of charity care and government-sponsored indigent health care that will be considered reasonable under Subsection (b)(1)(A).(d)
For purposes of this section, a hospital that satisfies Subsection (b)(1)(A) or (b)(3) shall be excluded in determining a hospital system’s compliance with the standards provided by Subsection (b)(1)(B) or (b)(1)(C).(e)
In any fiscal year that a hospital or hospital system, through unintended miscalculation, fails to meet any of the standards in Subsection (b), the hospital or hospital system shall not lose its tax-exempt status without the opportunity to cure the miscalculation in the fiscal year following the fiscal year the failure is discovered by both meeting one of the standards and providing an additional amount of charity care and government-sponsored indigent health care that is equal to the shortfall from the previous fiscal year. A hospital or hospital system may apply this provision only once every five years.(f)
A nonprofit hospital or hospital system under contract with a local county to provide indigent health care services under Chapter 61 (Indigent Health Care and Treatment Act) may credit unreimbursed costs from direct care provided to an eligible county resident toward meeting the nonprofit hospital’s or system’s charity care and government-sponsored indigent health care requirement.
Source:
Section 311.045 — Community Benefits and Charity Care Requirements, https://statutes.capitol.texas.gov/Docs/HS/htm/HS.311.htm#311.045 (accessed Jun. 5, 2024).
