Georgia finalizes hospital financial disclosure requirement

Georgia officials Thursday approved final rules for a new law requiring non-profit hospitals in the state to disclose a slew of financial information on the main page of their websites, including salaries of administrators, money spent on free treatment and balance sheets.

The disclosure requirements — passed by state lawmakers earlier this year — are intended to promote transparency about the financial health of hospitals and how much money they are putting into patient care.

But some hospital representatives object that they are a costly new mandate.

“I think the law was totally unnecessary,” said Monty Veazey, president and CEO of the Georgia Alliance of Community Hospitals. “There had not been a problem or issue that I’m aware of where somebody was doing something wrong.”

Under the new law, non-profit hospitals must post a link to financial documents in a “prominent location” on their main web pages. They must reveal their real estate holdings, patient revenue, outstanding loans and accreditation, among other pieces of information.

Non-profit hospitals receive tax breaks, so state lawmakers want to know what “they’re doing within their communities to address health care, to address indigent care populations,” said state Rep. Terry England, who helped craft the new law.

England said he was not aware of a similar requirement in any other state.

The Auburn Republican said he was particularly interested in how much money the state’s larger non-profit hospitals were putting away as reserves and how much property they were taking off of tax rolls.

“Ultimately, everybody needs to understand and see the truth as it relates to their local hospital,” he said.

Roughly 80% of the state’s 180 or so hospitals are non-profits, according to the Georgia Hospital Association.

Much of the information required under the new law was already publicly available, said Ethan James, a spokesman for the hospital association.

“Our not-for-profit hospitals have long been leaders with regard to financial transparency,” he said.

The law requires them to compile it and put it one spot — a task that is administratively burdensome and costly to the many rural hospitals that are struggling financially, James said.

The law had set a deadline of Oct. 1, 2019, for hospitals to post the information, and many have begun putting it up. Hospitals have spent an average of 80 hours and almost $12,000 to adhere to the law, according to a survey conducted by the Georgia Hospital Association.

Hospitals that don’t comply could lose state funds and donations.

State officials, however, have held off on any enforcement while they finalized some of the law’s requirements.

On Thursday, the board of the Georgia Department of Community Health completed that task, approving rules that clarify the mandate. The salary requirement applies to certain employees or contractors that receive a gross yearly salary or other payment that exceeds $100,000.

The rules also define what constitutes real estate.

The Georgia Hospital Association said in comments submitted ahead of the meeting that many of the provisions “remain open to interpretation” and could lead to “inconsistent reporting” among hospitals.