New community benefit law won’t alter Vail Health’s priorities

Nonprofit hospitals in Colorado that receive federal, state and local tax exemptions are expected to provide a certain amount of community benefit. And starting in August 2023, these hospitals — including Vail Health — will have new reporting requirements for how they spend toward “community benefit.”

The new requirements are part of a bill that Gov. Jared Polis signed into law on Wednesday, May 10, meant to bring about greater transparency for nonprofit health organizations.

The need for the legislation came out of the 2023 Colorado Department of Health Care Policy and Financing annual report on hospital community benefit accountability report. The department reported that Colorado nonprofit hospitals invested “$965 million in community benefits in 2020-21, not including Medicaid shortfall.”

(Conversely, a Colorado Health Association report on hospital community benefit spending reported that Colorado hospitals “directly invested more than $1.9 billion into the health and well-being of their communities” in 2021.)

While the Colorado Department of Health Care Policy and Financing acknowledged that these contributions were “significant” in its report, it saw a need for the state to “improve the state’s understanding of where the community dollars were actually invested while increasing hospitals’ transparency and accountability to their communities going forward.”

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Community benefit is a broad term but generally refers to numerous activities, programs and services meant to meet community needs. This can include free or discounted health care services, social determinants of health spending as well as spending around housing, food, transportation, interpersonal violence, education, and more.

Currently, the requirements around community benefit spending for hospitals are guided and overseen by the Internal Revenue Service.

The new law, in a statement from Kim Bimestefer, the executive director of the Health Care Policy and Financing department, is to “ensure that the local community voice is reflected in hospital community investments while the reporting provisions verify that alignment going forward.”

There are five main components of the passed law meant to increase transparency and ensure community needs are being met. These include more specific and detailed spending information reporting requirements; requirements for the hospitals to engage with the community in their community benefit process; expansion of requirements for the state department to establish community engagement best practices; a calculation of the value of nonprofit hospitals’ tax exemption; and certain non-compliance measures. All these measures will go into effect in August.

Vail Health and community benefit

“Regardless of the new state legislation, Vail Health has proudly been a leader in the state for the past four years, investing in community benefit,” said Nico Brown, Vail Health’s chief strategy officer. “We gather extensive data and community input through our Community Health Needs Assessment to inform where our community benefit is focused.”

Vail Health performs this assessment — as part of the current IRS regulatory requirements — every three years. The most recent report was released in October 2022. In a previous interview with the Vail Daily, Brown said the report is meant to identify “the gaps that we have here, it identifies — to granular levels — what we can do, what we are doing, and how we’re going to address those gaps.”

The report is compiled based on community demographic data as well as from a community stakeholder process in partnership with other local organizations.

As a result of this process, Vail Health has invested in a diverse array of community benefits, Brown said this week. This includes its $60 million cash commitment around behavioral health (including the creation of Vail Health Behavioral Health and support of other local organizations); a $194 million investment in compensation and benefits for its employees; free COVID testing and care; an increase in its financials assistance policy; and more.

It also includes “support of other local nonprofits such as My Future Pathways, the Community Market and Eagle Valley Community Foundation, Mountain Family Health Center, the Vail Valley Charitable Fund, the Vail Valley Partnership and many more,” Brown said.

“The bill does not change Vail Health’s focus on, and investment in, community benefit. It does add some administrative burden, which ultimately increases the cost of health care,” Brown said.

This, Brown added is “quite the opposite of what we’re all trying to achieve.”

Still, the organization intends to “continue its significant community collaboration and investment in alignment with our communities’ needs and the strategic mission of Vail Health.”

The new law was just one of many health care bills passed by legislators and signed into law by Polis following the 2023 legislative session. Other legislation includes new rules and regulations on prescription drugs, health insurance, gender-affirming care, and more.

With the new slate of legislation, not just this year, but the past several years, Brown acknowledged the work ahead that Vail Health and other Colorado health care institutions have in order to comply

“Given the amount of health care-related bills we’ve seen over the past four years, it would be prudent to take a timeout and work to appropriately understand what has been effective and what has not before enacting further health care-related legislation and regulation,” Brown said.