More legislators question need for consultants on rural hospital donations

Three prominent state lawmakers — siding with another influential colleague — say there’s no need for rural hospitals to hire consultants to obtain donations under a new Georgia program.

Rep. Duncan
Rep. Duncan

The program, created by a law passed during the 2016 session of the General Assembly, allows tax credits for those who donate to struggling rural hospitals.

The latest three legislators to speak out include the sponsor of the legislation, Rep. Geoff Duncan (R-Cumming). He said in a news release this week that the administrative burden for participating rural hospitals should be negligible and require no added staff or consultants.

They join a leading state senator who said last month that rural hospitals don’t need to hire outside firms to pursue these contributions.

State Sen. Jack Hill (R-Reidsville), chairman of the Senate Appropriations Committee, said in his newsletter Aug. 19 that the process was not complicated enough to require hospitals to pay consultants to attract donations, and that the hospitals could contact state agencies or his own office if they needed advice.

Hospitals’ situation is dire

The tax credit program, established through Senate Bill 258, has sparked widespread interest within the hospital industry. At the same time, attention has focused on new consulting services that aim to help rural hospitals market themselves and apply for the funds.


The effort to boost contributions by individuals and corporations is intended to address a growing problem in rural Georgia. Since the beginning of 2013, five rural hospitals in the state have closed, and many others are struggling financially.

Donations of up to $4 million to an approved rural hospital will be eligible for the tax credits, which will be awarded on a first-come, first-served basis. The statewide cap of tax credits will be $50 million in 2017, $60 million in 2018, and $70 million in 2019. The program is set to expire after three years.

State health officials say 48 rural hospitals are eligible to receive donations from individuals and corporations under the program.

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.

Adding to Duncan’s statements in the Monday press release was House Appropriations Chairman Terry England (R-Auburn), who said that “in working with Geoff to get final passage of the bill, our intention was that every dollar raised for the hospitals would go to stabilize them and not set up a program requiring them to hire staff or consultants in order to participate.

Rep. Terry England
Rep. England

“Geoff has continued to work with the departments of Revenue and Community Health to make the process simple and easy, both for the taxpayers and the hospitals,’’ England said. “I expect this program to have a sustaining impact on rural health care in Georgia for generations to come.”

House Ways & Means Committee Chairman Jay Powell (R-Camilla), who also served on the conference committee working out the final provisions of the legislation, praised the effort to help rural health care in the press release.

“This program creates a true public-private partnership in support of our struggling rural hospitals,’’ said Powell in a statement. “The program was designed so that all of the money would be used to support the hospitals with very little administrative effort required. There should be no need for any hospital to have to hire personnel or contract with outside consultants in order to take advantage of this program.”

Consultants cite school program

The director of Georgia HEART told GHN last month that the services provided are similar to those that are offered to private schools that seek donations in another tax credit program.

Jim Kelly
Jim Kelly

Jim Kelly, director of Georgia HEART, said Wednesday in an email that his organization “appreciates the leadership of Georgia lawmakers in passing such a vitally important piece of legislation. We are working with our participating rural hospitals in a manner that will effectively, efficiently, and ethically promote the tax credit program.”

Kelly told GHN in August that a few legislators had encouraged the company to help rural hospitals after Georgia GOAL’s success with attracting scholarship funds for private schools in Georgia.

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

Georgia HEART will start out charging hospitals 6 percent of the contributions collected, he told GHN in August.

Earl Rogers, president and CEO of the Georgia Hospital Association, said in a statement Wednesday that “it is 100 percent correct that no hospital needs to or must use a consultant, just as no taxpayer is required to use an accountant or CPA to submit their tax returns.

Earl Rogers
Earl Rogers

“However, for those hospitals that perhaps don’t have the resources to devote to fundraising and ensuring compliance with the reporting requirements, the use of a third-party vendor may be helpful. It’s a matter that each individual must carefully weigh and decide for themselves.”

The new income tax credit is for either 70 percent of an individual taxpayer’s contribution to an approved rural hospital, or $2,500, whichever is less. For a couple filing jointly, the credit could be 70 percent of the contribution or $5,000, whichever is less. A corporation or fiduciary taxpayer could get a tax credit of up to 70 percent of contributions or 75 percent of income tax liability.

The state will assess and rank eligible hospital organizations in order of their financial need by Dec. 1.

“It’s been extremely gratifying to watch the Rural Healthcare Reform Bill go from just an idea I had while sitting in church last October, all the way to a powerful tool for rural Georgia to help save its local health care systems,” said Duncan in a statement.

“I’m extremely grateful for the hard work of both DCH [the Department of Community Health] and DOR [the Department of Revenue] and their willingness to adhere to the original intent of this legislation by each drafting rules and regulations around this program that are both easy to understand and simple to navigate for all of the eligible hospitals,” he added.