Find more information about Community Catalyst projects in Utah.
OVERVIEW: Utah’s free care requirements are found, not in law or regulation, but in the state’s Property Tax Exemption Standards of Practice. Adherence to the Standards is required in order for a nonprofit hospital to qualify for an exemption from the state property tax. According to the Standards, nonprofit hospitals must have a formalized policy in place that guarantees open access to free or reduced charge services to indigent persons in accordance with their ability to pay. Hospitals must also affirmatively inform the public of its open access policy and the availability of services for indigent persons.
Exemption of Certain Property
Utah Code § 59-2-1101
Property Tax Exemption Standards of Practice, Standard 2, Appendix 2D: “Property Tax Exemption Standards: Nonprofit Hospitals and Nursing Homes,” Property Tax Division, Utah State Tax Commission (revised June 2007)
Qualified Immunity-Health Professionals-Charity Care
Utah Code § 58-13-3
Retired Volunteer Healthcare Practitioner Act
Utah Code § 58-81-101 to 58-81-104
The State Tax Commission has regulatory oversight of nonprofit tax status.
DEFINITIONS AND DISTINCTIONS:
“Indigent care” is defined as “the reasonable value of the hospital’s unreimbursed care to indigent patients.” Standards, Appendix 2D, p. 2-35
The Standards of Practice define “medically indigent” as “patients who are financially unable to pay for the cost of the care they receive.” Standards, Appendix 2D, p. 2-35.
FREE CARE AS A COMMUNITY BENEFIT:
Instead of referring to “community benefits,” the Standards use the term “gift(s) exchanged between the charity and the recipient of services or in the lessening of a government burden through the charity’s operation.” Standards, Appendix 2D, p. 2-35; see also Utah County v. Intermountain Health Care, Inc., 709 P.2d 265, 269 (Utah 1985). Indigent care may be counted towards the nonprofit entity’s total gift to the community. Standards, Appendix 2D, p. 2-35
Utah’s Tax Exemption Standards do not mandate the eligibility requirements nonprofit hospitals must establish in order to justify their state property tax exemptions. They do, however, require nonprofit hospitals to have a formalized policy in place that guarantees “open access” to care at no charge or a reduced charge for patients unable to pay. Standards, Appendix 2D, pp. 2-33 and 2-34.
FINANCING SOURCE: N/A
The “open access” requirement applies to all services generally available at the hospital or nursing home. Standards, Appendix 2D, pp. 2-33 and 2-34.
The health care entity must provide evidence of its efforts to “affirmatively inform” the public of its open access policy and the availability of indigent care as a condition of its tax-exempt status. Standards, Appendix 2D, p. 2-34.
APPLICATION PROCESS: N/A
GRIEVANCE/APPEAL PROCESS: N/A
REPORTING REQUIREMENTS: N/A
PENALTIES FOR NONCOMPLIANCE: N/A
In order to qualify for a state property tax exemption, nonprofit hospitals and nursing homes must show that their “gifts to the community” exceed their property tax liabilities for that year. Standards, Appendix 2D, p. 2-35.
Charitable immunity for charity care providers. In order to encourage medical providers to provide uncompensated or charity care, the Utah legislature granted qualified immunity to health care professionals and/or facilities for certain outpatient procedures in exchange for providing uncompensated services. Utah Code § 58-13-3(3)-(5). Qualified immunity can only be granted where the provider meets certain conditions. One of these conditions requires the provider to disclose to the patient, in writing, that the health care professional is providing services free of charge and that, in exchange, the patient agrees to waive the right to sue for professional negligence. Utah Code § 58-13-3(3)(d) (stating that the patient waives the right to sue except for acts or omissions that are grossly negligent, willful, or wanton).
In another measure meant to promote charity care, Utah has recently enacted the Retired Volunteer Healthcare Practitioner Act. Utah Code § 58-81-101. A healthcare practitioner licensed under this Act is entitled to qualified immunity for charity care, provided that he/she also meets the requirements of Utah Code § 58-13-3. Utah Code § 58-81-104.