I have no dog in the fight down in the Roanoke Valley but I have a dog in a fight up here in Winchester as I would like to know what was Carilion's NPR (Net Patient Revenue) and their actual "charity" given away from NPR ?

In Winchester, Valley Health's NPR was $549,019,607.84 based off information obtained from their website which I assume is accurate information. 

What was Carilion's NPR and Charity in 2007?


Are you folks aware of this ?

UVA-Hospital has a lawsuit (do not know the specifics for recourse) against them where a patient sued them for $5.5million and UVA stated their liability is only for $1.5million as a non-profit hospital,  but the patient said, Noooo cowboys, you are “for profit” as he proved they were acting as for-profit and he won.  Now I understand that it’s being appealed in State Supreme Court. 

Forgot to share this ...

As for Valley Health’s $200,000,000.00 million bonded debt, my “unnamed sources” states they were purchased by the majority; if not of all of the local/regional Doctors that NEVER hit the OPEN market at a 7% tax exempt status.   

“Healthcare Soundoff’s” perspective of Valley Health’s $56 million in “community benefits”:

1.    They claim to have actually rendered $18.9 million in charity care.  Care they gave away.  The trick here is what does the $18.9 represent.  My guess is that they use "charges" as the basis for calculating this figure.  No hospital receives charges for their services anymore. All hospitals regularly give substantial discounts off of charges to insured patients.  So this is an inflated figure.

2.    They claim a loss on Medicaid of $10.8 million.  This represents what they collected from Medicaid for services and what they did not receive if they had again received "charges."  This is also funny money.  They got paid for these services according to a Medicaid agreement they have signed but have accounted for it in a way that allows them to claim a loss for "charitable purposes."

3.    They wrote off $17.5 million in bad debts as uncollectible. This is off a "charges" figure as well. This is self explanatory.  Couldn't collect.

This totals $47.2 million.  The remaining $8.8 million they claim must be part of the expenses of all the services they list on that web page.

So if you were trying to figure out what the actual figure should be it would require you to assign a factor to "charges."  This represents a figure that the typical Blue Cross patient would pay.  I would say 85% of charges would be a good conservative starting point.  So the real figure would be closer to $40.1 million IF they were using realistic numbers.  So overall it looks like Valley gave away $48.9 which is not 9% but close.

Now here is the kicker … Bad debt and Medicaid write offs are the bulk of this calculation.  Many have argued that using Medicaid write offs to bolster your charity care number is intellectually and actually off base.  Why?  The hospital actually collects something for all of these services, not their charges or even what they want but they do collect.

To get the most accurate information on how they are reporting I would suggest you got to the IRS website and pull down the Valley Health Form 990 which is a public record.  Looking at the IRS 990s will be the best source.  It is what they file with the IRS and vouches for their charitable purpose.  When they are counting bad debt, Medicaid bad debt, and free services in the figure they use on their web page, I am sure they are using figures that are based on "charges" and those figures have no relationship to net patient revenue.

I am not familiar with the new regs re: the 9% of net patient revenue but there are very few hospitals that do not use "charges" to peg their write offs and equate that with charity care.  Look at the 990s.  There are a couple of websites that store them.  Go to google and search IRS 990 or nonprofit 990 and you might find the 2007 990 for Valley Health.  It will include all sorts of interesting information.

They will probably file their 2008 sometime in February or March.  The 2007 should be there.  Also contact wherethemoneygoes.org. They may be interested in your story and position.

I need to correct something, I was given inaccurate information about this 9% of net patient revenue.  The guidelines are described below:

In the 1969 revenue ruling that established the community benefit
standard, IRS recognized five factors that would support a nonprofit
hospital's tax-exempt status. These five factors were (1) the operation
of an emergency room open to all members of the community without
regard to ability to pay;[Footnote 30] (2) a governance board composed
of community members; (3) the use of surplus revenue for facilities
improvement, patient care, and medical training, education, and
research; (4) the provision of inpatient hospital care for all persons
in the community able to pay, including those covered by Medicare and
Medicaid; and (5) an open medical staff[Footnote 31] with privileges
available to all qualifying physicians. IRS further stated that tax-
exempt status would be determined based on the facts and circumstances
of each case, and that neither the absence of particular factors set
forth in the 1969 revenue ruling nor the presence of other factors
would be necessarily conclusive.

Nonprofit hospitals that qualify for tax-exempt status are exempt from
federal income taxation, have access to bond financing that generates
tax-free interest earnings for the bondholder--allowing these hospitals
to borrow funds at a lower cost than nonexempt entities--and are
eligible to receive contributions that are tax deductible for the
donors. In addition, these hospitals may also be exempt under state law
from state and local income, property, and sales taxes, which in some
cases are of a greater value than the federal income tax exemption.

Is there a website that lists usual and customary charges? Maybe thats something that this website could add.