Senator Expands Inquiry on Tax-Exempt Status of Hospitals

By Elizabeth Schwinn

A powerful Republican senator has asked the Government Accountability Office, Congress's investigative arm, to examine how much free care and other services nonprofit hospitals provide to the regions in which they are located.

Sen. Charles E. Grassley of Iowa said he is concerned that hospitals may not be providing enough services to their local areas to justify the tax breaks they receive. Mr. Grassley, the top Republican on the Senate Finance Committee, also said that some hospital executives and board members may be overpaid.

"There have been alarming reports about the lavish lifestyle that some of these individuals lead courtesy of the nonprofit hospital as well as the business ventures that enrich these individuals to the detriment of the nonprofit hospital," he said.

Mr. Grassley has been investigating nonprofit hospitals over the past two years as part of a wide-ranging inquiry into abuse of the tax laws governing charities.

A copy of Mr. Grassley's letter to the Government Accountability Office is available on the Web site of the Senate Finance Committee.