ATLANTA – At least six hospitals that participate in a tax credit program for Georgia’s cash-strapped rural hospitals have also tallied significant profit margins.

One of them, Tift Regional Medical Center in Tifton, reported making a $61.7 million profit, according to 2017 data from the state Department of Community Health.

Last year, Tift Regional also raised more than $1.3 million in donations through a popular program that gives donors a dollar-for-dollar income tax credit for contributions made to dozens of rural hospitals.

“It goes against the whole premise of the tax credit program, which was to help those neediest hospitals that were right on the edge of going under,” said Rep. Terry England, an Auburn Republican who chairs the budget-writing committee in the House.

“I’m proud for them,” England said of Tift Regional and others. “I’m glad they’re doing well, but the thing is, there are some out there in communities that aren’t doing well at all and those are the ones that the intent is to focus on and help bolster.”

Seven small-town hospitals have shut their doors here in the last five years, with two reopening on a smaller scale, according to Georgia Health News.

England is a sponsor of a measure that would expand the tax credit program to $100 million annually – up from $60 million – but limit the aid to hospitals that need it the most.

Specifically, the measure would add profitability as a factor for deciding which hospitals qualify for the assistance. Hospitals with a more than 15 percent profit margin would no longer be eligible.

Other than Tift Regional, five other hospitals would lose access to the pot of cash based on 2017 data, which is the most current available: Crisp Regional Hospital, Grady General Hospital, Phoebe Sumter Medical Center, Polk Medical Center and WellStar Sylvan Grove Hospital.

A new eligibility list is published every year, which means these hospitals could be eligible by the time a new list is published based on new financial data. Polk Medical, for example, just barely exceeded the proposed limit.

“We believe Tift Regional Medical Center (TRMC) should remain eligible for the Georgia HEART tax credit program,” Kim Wills, who is the hospital’s senior vice president and chief financial officer, said in a statement Friday. “We have made smart investments in the past and we have worked hard to lower costs, which helps contribute to a positive operating margin.  

“As a not-for-profit entity, TRMC’s rural community service commitment is still the same,” Wills added. “TRMC provided more than $133 million in indigent, charitable and uncompensated care in fiscal year 2018. Georgia HEART contributions help offset charitable care expenses and vital services that operate at a monetary loss.”  

The proposed changes are packed into a major bill that would overhaul the state’s health care regulations and impose new transparency requirements on non-profit hospitals, requiring them to publicly post what they pay their top staff, details on the properties they own and other public information.

The measure would also require that donations go to the neediest hospitals when donors give money with no specific hospital in mind. Last year, nearly $19 million piled up with nowhere in particular to go, with donors leaving that decision to a third-party firm.

But some hospital administrators say they are wary of factoring in a rural hospital’s profitability when deciding which facilities should participate.

“There’s lies, damn lies and statistics, and just after statistics is hospital finances,” said Daniel Graves, who chairs the hospital authority for Elbert Memorial Hospital in northeast Georgia.

To show how misleading a hospital’s bottom line can be, Graves pointed to his own facility’s finances. Last year, the books may have shown $2 million net income, but he said that was due in large part to $3 million in debt forgiveness from a previous affiliate. The hospital still had more than a $1 million operational loss. Elbert Memorial is considered one of the poorest hospitals in the program.

Perry Mustian, president and CEO of Archbold Medical Center, which includes Grady Memorial, said the state data also only shows a one-year snapshot, which may not be a good indication of how a hospital is doing more broadly.

Grady General reported a $4 million, or 16 percent, profit margin in 2017, according to DCH. But over a four-year period, the average operating margin was a little more than 10 percent, Mustian said.

And as a health care system, the profit margin was about 4 percent, according to Mustian.

“This is a more accurate picture of the financial reality of providing healthcare services for our four-county rural Georgia region,” Mustian said in a statement.  

Mustian said the system’s hospitals need programs like the tax credit program to stay financially viable. Grady General was expected to take in about $1.6 million last year in donations. As a system, the hospitals were set to collect more than a $4 million late last year through the tax credit program.

England, the state lawmaker, noted that if a hospital’s profits dip back down below 15 percent, the facility can find its way back into the program.

“The whole idea with the rural hospital tax credit has been to help sustain those hospitals that were financially unstable,” England said, adding that being able to put away 15 percent or more in profit is a luxury many rural hospitals do not have.