Massachusetts Hospitals Stockpile $1.6 Billion in Cayman Islands and other Offshore Accounts; Nurses Call for Financial Transparency

A bill pending on Beacon Hill will allow the public to see how hospital executives are spending tax dollars

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May 30, 2019, 09:50 ET

CANTON, Mass., May 30, 2019 /PRNewswire/ -- Hospital corporations across Massachusetts have placed at least $1.6 billion in the Cayman Islands and other well-known offshore tax havens, leading nurses and lawmakers to call for legislation requiring financial transparency from hospitals and the returning of excess profits and CEO pay to the public good.

"We can improve our health care system by shining a light on hospital finances, limiting excessive CEO pay and ensuring that the public has a stronger voice in shaping how our health care dollars are spent," said Karen Coughlin, a 35-year RN from Mansfield and Vice President of the Massachusetts Nurses Association.

The Hospital Profit Transparency and Fairness Act (S. 714/H. 1144) requires hospitals to disclose financial holdings and profits, including money kept in offshore accounts. It will also claw back excessive profits and CEO pay and return that money to the public good through a newly created Medicaid Reimbursement Enhancement Fund. Massachusetts hospitals are both largely non-profit organizations and publicly funded through tax dollars.

Hospital Corporation	City/Town of Hospitals	IRS 990 or Auditor Data (FY 2017 unless otherwise noted)	Offshore Account Location, etc.	Public Payer Mix (% of revenue from Medicare, Medicaid, and state funds)
BAYSTATE HEALTH	Greenfield, Palmer, Springfield, Westfield	$100,801,000	Cayman Islands	69.1% (avg. of hospitals)
PARTNERS HEALTHCARE	Boston, Newton, Salem, Nantucket, Northampton, Martha's Vineyard, Belmont	$100,909,744	2016 data	65.6% (avg. of hospitals)
LAHEY HOSPITAL & MEDICAL CENTER	Burlington	$74,313,000	Bermuda	60.1%
TUFTS MEDICAL CENTER PARENT INC.	Boston	$1,682,860	Central America & the Caribbean	61.9%
BOSTON CHILDREN'S HOSPITAL	Boston	$376,247,495	Central America & the Caribbean; Sub-Saharan Africa	34.7%
WINCHESTER HOSPITAL	Winchester	$894,158	Bermuda	46.3%
SOUTHCOAST HOSPITALS GROUP	New Bedford, Fall River, Ware	$26,399,000	Specific location unavailable	74%
SOUTH SHORE HOSPITAL	Weymouth	$3,749,000	2015 data	60%
HALLMARK HEALTH	Reading, Medford, Melrose	$6,530,000	Specific location unavailable	63.3% (MelroseWakefield)
BERKSHIRE HEALTH	Pittsfield North Adams	$13,586,165	Cayman Islands	68.2% (avg. of hospitals)
NORTHEAST HOSPITAL CORP. (BEVERLY & ADDISON GILBERT)	Beverly, Gloucester	$12,075,000	Bermuda	64.6%
CAPE COD HEALTHCARE	Hyannis, Falmouth	$29,808,000	Cayman Islands	71.8 (avg. of hospitals)
BOSTON MEDICAL CENTER	Boston	$87,103,000	Cayman Islands	76.9%
UMASS MEMORIAL HEALTH	Worcester, Marlborough, Leominster	$171,000,000	Cayman Islands	65.6% (UMass Memorial Medical Center)
TRINITY HEALTH	Holyoke, Springfield	$654,092,000	Specific location unavailable	74.2% (Mercy Medical Center)
MILFORD REGIONAL MEDICAL CENTER INC.	Milford	$678,257	Central America and the Caribbean, Europe, East Asia & the Pacific	52.3%
TOTAL		$1,659,868,679		Average: 63% Source: FY 2017 data from CHIA

* For source documents related to the table, please email [email protected].

"We know that every major network in the state, including Baystate Health, Partners and Lahey have offshore accounts in tax havens like the Cayman Islands by digging through opaque, complex financial forms," said RN and MNA President Donna Kelly-Williams. "Taxpayers have a right to know how much of their money is sitting in an offshore bank account or going toward out-of-state expansion – especially if those taxpayers live in a community that has just lost an essential service."

Bill Co-Sponsor Senator Michael Moore:

"Given the high cost of health care, the public deserves to know what hospital executives are doing with public funds. Many people do not realize that many of the Commonwealth's multi-billion-dollar hospital corporations are largely funded by taxpayer dollars. Transparency in regard to the use of those funds is critical to maintaining public trust."

Bill Co-Sponsor Representative Josh Cutler:

"Our Medicare, Medicaid and other state tax dollars fund hospital corporations, but what those corporations do with our money can be at odds with public service. This bill will allow the public to see exactly where our tax dollars are going – especially if they end up in the Cayman Islands – and limit excessive hospital CEO pay. We should instead spend that money helping our most vulnerable patients."

To address this issue, The Hospital Profit Transparency and Fairness Act (S. 714/H. 1144) will:

Require hospitals to be transparent about their financial holdings and other activities.
Assess any hospital receiving taxpayer dollars that has an annual operating margin above a specific, predetermined cap.
Assess any hospital receiving taxpayer dollars that provides a compensation package for its CEO that is greater than 100 times that of the hospital's lowest paid employee.
Deposit assessments in a newly created Medicaid Reimbursement Enhancement Fund to increase Medicaid reimbursement rates to eligible hospitals as a way to claw back excess profits and ensure that taxpayer dollars are dedicated exclusively to safe patient care and necessary services for all communities in the commonwealth.

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Founded in 1903, the Massachusetts Nurses Association is the largest union of registered nurses in the Commonwealth of Massachusetts. Its 23,000 members advance the nursing profession by fostering high standards of nursing practice, promoting the economic and general welfare of nurses in the workplace, projecting a positive and realistic view of nursing, and by lobbying the Legislature and regulatory agencies on health care issues affecting nurses and the public.

SOURCE Massachusetts Nurses Association