Interesting. This has implication for other hospital systems (UPMC) if the rulings are upheld.

Fascinating. If they weren't meeting criteria for being a non-profit it makes sense it is revoked and the community collects taxes. But the idea of a for-profit hospital concerns me.

The ruling was from a while ago; not seeing any appeal docketed higher up.

"However, Rodriguez is realistic about what comes next. Considering the likelihood that Tower Health will appeal the decision to a higher court — they have until March 12 to file a notice of appeal — Rodriguez is not counting his additional tax dollars just yet."

Article says they have a few more months to appeal. Maybe by mid year we'll have a better answer.

Maybe I did only read it last week; seems longer ago.

Yeah that’s the unfortunate truth behind this dance that people don’t want to admit.

The implication is they charge us higher prices for services. It’s robbing Peter to pay Paul.
It sounds good until you consider the consequences. It will also have implications for any nonprofit that charges a fee like museums and the symphony. The state constitution is vague on the issue so the courts are just going to make up whatever they want

Now do Pittsburgh

> Pennsylvania requires charities to be "institutions of purely public charity" to qualify for exemption. HUP test, which has 5 criteria ...... 5. Operates entirely free from private profit motive.

What is the definition of private profit motive?

> "The “eye popping” compensation paid to executives at four hospitals owned by Tower Health LLC disqualifies the nonprofits from charitable tax-exempt status, a Pennsylvania appeals court ruled in four related cases.

So highly compensated employees is the bar? Then let's remove non-profit status from all universities and colleges then.

Every single non-profit of note requires highly talented professionals to run it. Everyone knows how difficult it is for non profits to hire competent people as it is. So let's attack that aspect of non profits even more?

You hit the nail on the head. “Purely public charity” is vague and up to the courts to interpret without clarification from the legislature. My interpretation is they don’t give any profit for shareholders. However people really hate highly paid executives and conflate that with profit distributed to shareholders. One of the judges even said he stretched the truth to get the case appealed bc he has no idea how to interpret the vague law.

Next Month's headline: Pottstown Hospital to Close.

> 5. Operates entirely free from private profit motive

This criteria is impossible to achieve.

Every single employee that is working at a non-profit and draws a salary (it doesn't have to be a high salary) has a presumed profit motive.

They want their employers to remain solvent, which would mean they continue to receive a paycheck, and/or they want their employer to grow so they can be better compensated or giving them a chance to move up in the hierarchy.

They should all be paying taxes. They shouldn't be treated like charities while any patient is filing bankruptcy due to medical bills.

Money changing hands isn’t always classified as a profit motivation which is receiving money as a result of prior capital contribution to the entity.
The definition of profit doesn’t include an employees salary even though there is a link between them. It gets a little tricky with executive bonuses and how much influence they have at deciding their own compensation but these large non profits have a lot of lawyers to figure that out

The implication is that it simply goes out of business like so many other smaller hospitals lately.

They have not been having good years.

I was responding to the comment about upmc. What are you talking about?

It's more complicated than that. You left out the part where it says that 40% of the CEO's salary is tied to profits. That gives away what they're trying to hide here: that the main goal is to make profits. You know, the thing that a non-profit is not meant to prioritize. They didn't peg executive compensation to the quality of care received by patients but to profit and that tells you everything you need to know.

If they're going to priotize profits, they're free to do so. They just have to pay tax on that profit like every other for-profit business out there.