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

CANTON, Mass. – 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.

* For source documents related to the table, please email jmarkman@mnarn.org.

“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.

“