OLR Report 2013-R-0266 gives a brief summary of how Connecticut's acute care hospitals are regulated. It also describes what actions nonprofit acute care hospitals must take to maintain their 501(c)(3) tax-exempt status.
Several state agencies provide oversight of Connecticut's acute care hospitals, including the departments of public health (DPH), social services (DSS), consumer protection, energy and environmental protection, labor, and insurance. Hospitals are primarily regulated by DPH and DSS through licensure, the certificate of need (CON) process, data collection, and the disproportionate share hospital (DSH) program.
Hospitals are also regulated by various federal agencies, including the Centers for Medicare and Medicaid Services (CMS), Occupational Safety and Health Administration, Centers for Disease Control and Prevention, and the Internal Revenue Service (IRS), among others. Most hospitals also comply with accreditation rules from private organizations, such as the Joint Commission, to receive Medicare and Medicaid certification (i.e., deemed status).
In Connecticut and most other northeastern states, the vast majority of hospitals are nonprofit. To qualify for tax-exempt status, nonprofit hospitals must meet various requirements under federal law, including, among other things, (1) being organized and operated exclusively for charitable or other specified purposes, (2) having no net earnings benefitting any private shareholder or individual, (3) restricting political activity, and (4) providing community benefits sufficient to justify their tax-exempt status.
The 2010 federal Patient Protection and Affordable Care Act (ACA) added to the requirements for nonprofit hospitals to maintain their nonprofit status. Specifically, it requires nonprofit hospitals to conduct community health needs assessments at least once every three years and make the assessments widely available to the public. It also adds requirements regarding financial assistance policies and billing and collection practices.
For more information, read the full report.
