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Helping nonprofit hospitals invest their community benefit funding in housing

Over the last month, I’ve participated in two health and housing-related meetings: NHC’s health and housing working group meeting in Denver, Colorado, and a roundtable held by the Bipartisan Policy Center (BPC) focused on how the HUD and the Department of Health and Human Services can better support each other.

The Community Health Needs Assessment (CHNA) and the accompanying community benefit activities requirement was a topic of both of those meetings. If you need a refresher on the CHNA, NHC published a great primer in March of 2016. Under the Affordable Care Act, nonprofit hospitals are required to conduct a CHNA every three years and address the needs identified in the CHNA process through community benefit activities spending.

A 2013 study found that hospitals spend a significant portion of their community benefit activities (about 85 percent) to cover uncompensated medical care or other clinical services. The remaining 15 percent can be used to address a wide range of social determinants of health, so long as they are identified during the CHNA process.

What happens with the money that’s left over after uncompensated medical care has been paid for is especially pertinent for areas like the District of Columbia, where the uninsurance rate is a low 3.7 percent. This money can be used to address a wide range of housing needs, from building more affordable housing so people can spend their money on food and healthcare to retrofitting units with air filtration systems. But we face two major roadblocks to using this money for housing.

First, housers need to be at the table when hospitals conduct their CHNA every three years to raise housing as a community need to be addressed. In order for nonprofit hospitals to maintain their tax-exempt or charitable status under section 501(c)3, the IRS requires they complete the CHNA. As of now, the IRS doesn’t have a database or timetable of when nonprofit hospitals are required to conduct the CHNA. That means that we’re required to do some legwork and reach out to our local hospitals to inquire as to when they are conducting their CHNA.

Second, housers need to make it easy for hospitals to invest in housing. Many hospitals are new to housing and the demand for affordable housing can make them feel overwhelmed. A BPC roundtable participant suggested creating a program similar to the Low-Income Housing Tax Credit for the leftover community benefit activities money not spent on uncompensated care. State HFAs could potentially administer the program and allow hospitals to spend the money but not require them to develop expertise in affordable housing development.

It is important to acknowledge here that recent actions by President Trump to cease payment of cost-sharing reduction subsidies could dramatically increase the amount of uncompensated care that hospitals need to pay for through the community benefit activities spending. Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) are working on bipartisan legislation that would continue paying the cost-sharing reduction subsidies for two years. In the absence of such a legislative fix, hospitals should use the community benefit activities funding to be reimbursed for uncompensated medical care before they spend money on other activities.

NHC’s health and housing working group is designed to explore how these sectors can support one another. We’re focused on how to make the financial case to healthcare organizations that investing in affordable housing is good for their bottom line, and how to replicate one-off programs and bring them to scale. Our work is far from done, but over the last year we have gotten a lot closer.

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