HAGERSTOWN, Md. — Nonprofit hospitals are exempt from paying most federal, state and local taxes in exchange for providing free or discounted care and programs that address community health needs — things like substance use treatment, food, transportation and mobile clinics.
A new report from the Lown Institute, an independent healthcare think tank, finds that Meritus Medical Center spent more on financial assistance and community investment than the estimated value of its tax exemption in 2021, giving the hospital what the Institute calls a “fair share” surplus. Meritus Medical Center is among only 20 percent of nonprofit hospitals nationwide to have such a surplus, and in the top 1.5 percent for the amount of additional spending for community benefit. This is the second year in a row that Meritus was in the top 1.5 percent of all nonprofit hospitals the Lown Institute ranked.
The vast majority of hospitals in Lown’s study did not meet their obligations as nonprofit entities. According to the most recent data available, Meritus spent $27 million more than the estimated value of its tax exemption on charity care and community investment.
“We never turn away a patient who needs care,” explained Meritus President and CEO Maulik Joshi, Dr.P.H. “As the community’s largest provider of free care, we believe supporting charity care, educational initiatives and other forms of community benefit are the way we live our mission of improving the health of the community.”
“Hospitals increasingly recognize the importance of going beyond their walls to improve community health,” said Vikas Saini, M.D., president of the Lown Institute. “These hospitals are leading the way in essential community health investments.”
Lown calculated Fair Share Spending by comparing the estimated value of hospitals’ tax exemptions to the amount spent on financial assistance and meaningful community investment — including community health improvement activities, cash and in-kind contributions to community groups, community building activities, and subsidized health services. Data was sourced from IRS Form 990 for fiscal year ending 2021. Only private, nonprofit hospitals with available IRS tax filings were included.
