Did Sentara Healthcare Abuse Its IRS Tax-Exempt Status?

2021-06-10

Checks & Balances Project Files Complaint With IRS Asking for an Investigation

Checks and Balances Project (C&BP) has filed a complaint with the IRS asking the agency to investigate and, depending on the findings of that investigation, possibly remove Sentara Healthcare’s nonprofit, tax-exempt status. Here is the Memorandum in Support. C&BP has exposed Sentara’s unclear financial assistance policies, possible overcharges of uninsured patients and aggressive action against competitors.

A C&BP investigation using Sentara’s “Transparent Pricing Tool” reveals charges for medical services on a patient’s bill exceeded its list prices. Formulating and honoring those prices is a factor in the conglomerate’s tax-exempt status, and, if the IRS determined it was egregious, the loss of tax-exempt status could result in Sentara paying back taxes that could wipe out a significant portion of its $6 billion in cash reserves. A request for comment by Sentara has gone unanswered.

The details of the complaint include:

Sentara’s financial assistance policy is hard to find and decipher, which is a potential violation of both the Affordable Care Act and IRS rules. Sentara may have engaged in a pattern of overcharges for uninsured patients, something C&BP has asked Virginia Attorney General Mark Herring to probe.
Sentara helped force rival DePaul Memorial Hospital to close through its use of the courts and Virginia’s arcane Certificate of Public Need (COPN) process.
Sentara allegedly interfered with the business practices of rival Chesapeake Regional Medical Center (CRMC), according to a recent lawsuit, while also trying to sabotage CRMC’s attempts to start an open-heart surgery unit.
The complaint, filed June 10, follows C&BP’s earlier requests for a Federal Trade Commission investigation of Sentara’s proposed $11.5 billion merger with North Carolina’s Cone Health and a request to Virginia Attorney General Mark Herring to determine whether the apparent overcharging of an uninsured patient is an isolated incident or part of a larger pattern of overbilling by Sentara.

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Ray Locker is enterprise and investigative editor of Checks and Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.