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Boston Marathon bombing. Jessica Rinaldi/Reuters. Boston Marathon bombing. Jessica Rinaldi/Reuters.  

Boston Marathon victim’s rehab hospital will have tax-exempt status reviewed under Obamacare

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Patrick Howley
Political Reporter

The nonprofit hospital that treated the final victim of the Boston Marathon bombing attack will have its tax-exempt status reviewed under Obamacare and could face hefty fines and other penalties.

Boston’s Spaulding Rehabilitation Hospital, which treated amputee Marc Fucarile as he recovered from the loss of his leg in the April 15 terrorist attack, is run by a nonprofit 501(c)3 hospital network that will be subject to new scrutiny of its tax-exempt status and potentially massive fines under Obamacare.

A new provision in Section 501 of the Internal Revenue Code, which takes effect under Obamacare, sets new standards of review and installs new financial penalties for tax-exempt charitable hospitals. To be tax-exempt, hospitals have to devote a certain minimum amount of their expenses to treat uninsured poor people.

Charity for the uninsured is one of the factors that could discourage enrollment in Obamacare, which requires all uninsured Americans to purchase health insurance. Removing the tax-exempt status of nonprofit hospitals will yield more tax revenue for the federal government.

“The requirements generally apply to any section 501(c)(3) organization that operates at least one hospital facility,” according to a “Technical Explanation” report of new Obamacare provisions prepared by the congressional Joint Committee on Taxation (JCT) on March 21, 2010, the day Obamacare passed.

Obamacare’s new requirements could slam hospitals with massive $50,000 fines if they fail to meet bureaucrats’ standards.

“The hospital must disclose in its annual information report to the IRS (i.e., Form 990 and related schedules) how it is addressing the needs identified in the assessment and, if all identified needs are not addressed, the reasons why (e.g., lack of financial or human resources),” according to the JCT report. ”Each hospital facility is required to make the assessment widely available. Failure to complete a community health needs assessment in any applicable three-year period results in a penalty on the organization of up to $50,000.”

The government is particularly interested in how and why hospitals will be providing discounted or free care to poor patients, requiring each of them to “adopt, implement, and widely publicize a written financial assistance policy” and explain the methods they use to screen applicants for assistance and how they calculate patients’ bills.

Spaulding Rehabilitation Hospital, the official teaching hospital for the physical medicine and rehabilitation department at Harvard Medical School, is also the official rehabilitation hospital of the New England Patriots. It boasts a $1 million annual budget for community-based services, including employment services for the disabled and sports programs for disabled children.

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