Donation program for rural hospitals opens door for consulting firms Donation program for rural hospitals opens door for consulting firms
State health officials say 48 rural hospitals are eligible to receive donations from individuals and corporations under a new Georgia program that will give... Donation program for rural hospitals opens door for consulting firms

State health officials say 48 rural hospitals are eligible to receive donations from individuals and corporations under a new Georgia program that will give tax credits to donors.

The list of eligible hospitals, along with financial forms, were issued by the state Department of Community Health this week. The tax credit program, passed by the Legislature this year, has generated high interest within the hospital industry.

At the same time, new attention has been focused on the creation of consulting services that aim to help rural hospitals market themselves and apply for the funds.

An influential state senator says rural hospitals don’t need to hire outside firms to pursue these contributions. The Georgia Hospital Association, meanwhile, has partnered with such a vendor.

Geoff Duncan speaking to rural hospital officials.

Geoff Duncan speaks to rural hospital officials during the Legislative session.

Senate Bill 258, spearheaded by Rep. Geoff Duncan, a Cumming Republican, allows $50 million in tax credits for donor contributions in the first year, 2017. The amount for the second year will be $60 million, and for the third year, $70 million.

“It’s really exciting to see it go from concept to reality in less than a year,’’ Duncan told GHN on Tuesday.

The hospital must report the receipt and expenditure of all donations. Hospitals run by for-profit companies are not eligible for the donations.

The contributions by individuals and corporations are intended to boost rural health care in Georgia after years of financial setbacks. Since the beginning of 2013, five rural hospitals have closed in the state.

Jimmy Lewis of HomeTown Health, an association of rural hospitals, says these facilities suffer from problems that include reduced government funding; CEO turnover; aging buildings; technology costs; and a high number of uninsured patients who frequently visit emergency rooms. (ERs cannot turn away patients unable to pay, but using expensive emergency care for patients with routine problems can be a financial drain.)

The lack of Medicaid expansion in Georgia has also hurt rural hospitals, experts say. Expansion would give health coverage to many currently uninsured patients, allowing hospitals to be reimbursed for treating them. Legislative leaders and the governor have said expanding Medicaid would be bad budgetary policy.

 

‘No reason’ to hire advisers, says legislator

 

To gain the contributions under the new program, the eligible hospitals must submit financial information and a five-year “viability and stability plan’’ in order to qualify to make a final state list later this year.

Stewart Webster Hospital

Stewart Webster Hospital in rural Georgia closed in 2013.

The state will assess and rank eligible hospital organizations in order of their financial need by Dec. 1. Each hospital may receive up to $4 million in contributions annually.

Recently, an Atlanta-based organization, Portage Charity Advisors, created Georgia HEART (Helping Ensure Access to Rural Treatment) to help hospitals handle the administrative work involved.

The Georgia Hospital Association, through its subsidiary Georgia Hospital Health Services, is working with Portage to help hospitals take advantage of the new funds, according to a GHA press release.

“We are pleased to be involved in efforts to ensure Georgia’s rural hospitals benefit from these additional dollars,” said GHA President and CEO Earl Rogers in the press release. “Portage has a demonstrated track record of success with its great work with the Georgia GOAL Scholarship Program and is an excellent choice for helping Georgia’s rural hospitals with this tax-credit program.”

Ethan James, a Georgia Hospital Association vice president, declined comment to GHN on the organization’s relationship with Portage and Georgia HEART.

Sen. Jack Hill

Sen. Jack Hill

But state Sen. Jack Hill (R-Reidsville), chairman of the Senate Finance Committee, said in his newsletter Aug. 19 that hospitals don’t need to hire consulting firms to help them obtain the donations.

“This process will not be complicated,’’ Hill wrote in the newsletter. “There is no reason for any hospital, individual or business to contract with or hire a third party vendor to receive the benefits of this tax credit. Please call me, the Department of Revenue or the Department of Community Health with any issues or questions at the appropriate time.”

Jim Kelly, director of Georgia HEART, told GHN on Wednesday that a few legislators encouraged the company to help rural hospitals after Georgia GOAL’s success with attracting scholarship funds for private schools in Georgia.

With a 2008 law that allows tax credits for donations, Georgia GOAL works with 131 private schools to help obtain money for student scholarships. “We saved them a lot of money,’’ Kelly said.

He said SB 258 creates a similar administrative burden as it does for the school tax credits, and that HEART will offer a variety of services to address donor and hospital requirements.

“Most rural hospitals won’t have a development office,” Kelly said. “The hospitals won’t have to hire a development person.”

Jim Kelly

Jim Kelly

Georgia HEART will start out charging hospitals 6 percent of the contributions collected, he said.

Duncan, the main driver of the legislation, told GHN that his intent has been to keep the rules for the donation program as simple as possible, so hospitals can continue to focus on medical services. “Hopefully it’s not an administrative burden,’’ he said.

He said he’s not familiar with the details of consulting firms being created to address the law.

Lewis, of HomeTown Health, said hospitals can identify potential donors in their communities through their own marketing staffs.

“There’s no reason [to hire] a consultant to take money away from the original pot,’’ Lewis told GHN on Tuesday. “A consultant will charge some fee, and that will come out of the pot the hospital qualifies for.”

 


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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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