Research Full Report State Laws and Nonproft Hospital Community Beneft Spending Emily K. Johnson, MS; Rose Hardy, MPH; Tatiane Santos, MPH; Jonathon P. Leider, PhD; Richard C. Lindrooth, PhD; Gregory J. Tung, PhD, MPH ABSTRACT Objective: To determine the association of state laws on nonproft hospital community beneft spending. Design: We used multivariate models to estimate the association between different types of state-level community beneft laws and nonproft hospital community beneft spending from tax flings. Setting: All 50 US states. Participants: A total of 2421 nonproft short-term acute care hospital organizations that flled an internal revenue service Form 990 and Schedule H for calendar during years 2009-2015. Results: Between 2009 and 2015, short-term acute care hospitals spent an average of $46 billion per year in total, or $20 million per hospital on community beneft activities. Exposure to a state-level community beneft law of any type was associated with an $8.42 (95% confdence interval: 1.20-15.64) per $1000 of total operating expense greater community beneft spending. Spending amounts and patterns varied on the basis of the type of community beneft law and hospital urbanicity. Conclusions: State laws are associated with nonproft hospital community beneft spending. Policy makers can use com- munity beneft laws to increase nonproft hospital engagement with public health. KEY WORDS: community beneft, nonproft hospitals, state laws E very year, nonproft hospitals beneft from a federal income tax exemption. In 2002, the Government Accountability Offce esti- mated the value of this tax exemption at approxi- mately $12.6 billion. 1 More recently, Rosenbaum et al Author Affliations: Colorado Health Institute, Denver, Colorado (Ms Johnson); Department of Health Systems Management and Policy, Colorado School of Public Health, University of Colorado Anchutz, Aurora, Colorado (Mss Hardy and Santos and Drs Lindrooth and Tung); and Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore, Maryland (Dr Leider). Our research protocol was reviewed by the Colorado Multiple Institutional Review Board and determined to be not human subject research (COMIRB Protocol 15-0034). This work was funded by a grant from the Agency for Healthcare Research and Quality (grant nos. R01 HS024959). The authors declare no conficts of interest. Supplemental digital content is available for this article. Direct URL citations appear in the printed text and are provided in the HTML and PDF versions of this article on the journal’s Web site (http://www.JPHMP.com). Correspondence: Gregory J. Tung, PhD, MPH, Department of Health Systems Management and Policy, Colorado School of Public Health, University of Colorado Anchutz Medical Campus, 13001 E 17th Place, Mail Stop B119, Aurora CO 80045 (gregory.tung@ucdenver.edu). Copyright © 2018 Wolters Kluwer Health, Inc. All rights reserved. DOI: 10.1097/PHH.0000000000000885 estimated the value at $24.6 billion, and Herring et al estimated that the value of the tax exemption amounted to 5.9% of total hospital expenses. 2,3 Since 1969, the internal revenue service (IRS) community beneft (CB) standard has required nonproft hospitals to provide CB in order to qualify for tax exemptions. 4 However, prior to the Patient Protection and Afford- able Care Act (ACA), neither the IRS nor any other federal entity specifed what CB should entail on min- imum spending amounts. As a result, states were left to interpret the federal CB standard and have devel- oped varied approaches to increase nonproft hospital accountability for provision of CB. 5 The ACA aimed to address this inconsistency with nationwide CB re- quirements and reporting standards. 6,7 However, wide variation in CB spending remains across the nation. 2 There is no consensus methodology for determining an “appropriate” level of nonproft hospital spending on CB activities needed to justify the nonproft tax exemption, though a handful have been suggested. 5,8 The IRS has never revoked nonproft status due to low CB spending. In addition, appropriate CB spending al- location likely looks different depending on commu- nity characteristics, for example, well-insured popu- lations may value spending on education or research, Copyright © 2018 Wolters Kluwer Health, Inc. Unauthorized reproduction of this article is prohibited. July/August 2019 • Volume 25, Number 4 www.JPHMP.com E9