Montana’s Tax-Exempt Hospitals Oppose Increased Oversight by State Officials

As Montana officials seek to make nonprofit hospitals prove the benefits they provide the community justify their tax exemptions, industry leaders propose their own changes — which state officials say would further limit state’s authority. By Katheryn Houghton | KHN

Nonprofit hospitals are fighting Montana's attempt to boost oversight of the ways they claim they provide benefits to their communities in exchange for millions of dollars in tax breaks.

It’s the latest clash in a national struggle between policymakers and the industry over whether hospitals’ charitable giving is enough to justify their tax-exempt status.

Montana Department of Public Health and Human Services officials have asked state lawmakers to pass a bill authorizing the agency to create standards and reporting requirements for the community benefits nonprofit hospitals report, saying the information collected now is insufficient. Montana hos pitals get state and federal tax breaks each year with little oversight of how that’s earned.

The Montana Hospital Association opposes the bill despite initially saying it would support the measure if it didn't conflict with federal rules. Now, the association is seeking changes to the bill that state officials said would actually shrink the department’s oversight, gutting the bill of its original purpose.

The Montana debate illustrates a power struggle playing out nationally between state policymakers who want more of a watchdog r...