Not-for-Profit Hospitals: Conversion Issues Prompt Increased State Oversight

Pursuant to a congressional request, GAO reviewed the process that some not-for-profit hospitals have used in converting to for-profit status, focusing on: (1) the method used to value assets; (2) the process used to solicit interest and obtain bids; (3) the terms negotiated as part of the sales agreement, including provisions for continued charity care; (4) the extent of community involvement in the process; (5) how the proceeds from the sale were used to fulfill charitable missions; and (6) the role state and federal governments play in regulating and monitoring hospital conversions.