The Evolution of Charity Care within the Healthcare Industry Available to Purchase

Tax‐exempt classification of nonprofit hospitals has been increasingly subject to federal and state examination. Considering the benefits tax‐exempt entities receive, it should not be surprising that these organizations face heavy regulatory scrutiny. The problem for tax‐exempt hospitals is the lack of a clear and concise definition of charity care in order to maintain exempt status. State and local regulations aside, the IRS has not presented a consistent position regarding standards for nonprofit hospitals. This paper examines the evolution of hospital tax‐exempt status and its relationship to charity care. Given the IRS's evolving and conflicting definitions of charity care, we can expect this issue to be debated for a long time to come.