By Mary Alice Murphy

The recent meeting of the Gila Regional Medical Center Governing Board, where an announcement was made about the hospital planning to seek non-profit 501(c)(3) status in addition to GRMC being county-owned, brought up some questions for this author.

This author sent the questions by email to Interim Chief Executive Officer Scott Manis and Interim Chief Financial Officer Greg Brickner. They considered it an IPRA request, and the answers came back from GRMC counsel, CaraLynn Banks.

The first question asked whether the 501(c)(3) entity would be separate in structure from the county-owned financial structure. The short answer was No. It will remain a county-owned hospital and will have a dual status designation with the 501(c)(3) designation from the Internal Revenue Service, which "gives it added benefits available to non-profit-organizations."

Another question addressed the potential of a need for separate sets of books, but the reply was that "only one set of financial records will be required."

More explanation said the charitable organization is an IRS tax designation. "The issue in terms of tax exemption is how the profits are used. Generally, a for-profit hospital distributes its profits to shareholders and a not-for-profit hospital invests any profits in sustaining the hospital and supporting the hospital mission."

The only additional paperwork will be the requirement that Gila Regional file an IRS 990 each year. The 990 form is the income tax return for an exempt organization.

Under the dual designation, GRMC does not pay income tax, as it is county-owned. It does pay New Mexico gross receipts tax at the government rate. Taxation will remain the same.

As for benefits, not only will Gila Regional be eligible to receive governmental and private grants, but donors to the hospital will receive a tax deduction for their donations.

In addition, having the 501(c)(3) designation will allow GRMC to address the audit findings relating to the retirement fund structure. Plus, the hospital will be able to take advantage of special postage and mailing privileges and receive discounted rates for announcements and press releases. Some stores and businesses may choose to offer a discount to Gila Regional Medical Center employees if they present a copy of the status designation letter.

GRMC will continue to be a county-owned, critical access hospital. The only change is the IRS designation as a charitable organization, after such status is approved.