Maryland lawmakers hit pause this week after explosive whistleblower testimony alleged that some of the state's nonprofit hospital systems quietly shifted billions of dollars into offshore insurance subsidiaries. The claims prompted senators to order a formal review and temporarily freeze certain tax enforcement, turning a typically wonky topic into a rare, bipartisan deep dive into hospital finances in Annapolis.
Yesterday, whistleblower Jason Schupp told a Senate committee that at least 10 nonprofit hospitals created offshore, for-profit subsidiaries and routed what he described as billions in proceeds into them. He testified that the setup is already costing Maryland roughly $30 million and said the transfers totaled at least $1.8 billion, with money sent to offshore domiciles such as the Cayman Islands, according to The Baltimore Sun.
In response, lawmakers advanced SB 890, sponsored by Sen. Dawn Gile. The bill would pause collection of the premium-receipts tax on captive insurance used by nonprofit hospitals while the state studies how these arrangements actually work in practice. It directs the Maryland Insurance Administration to examine how captive insurers are used, regulated, and taxed, and to deliver findings to the General Assembly by Dec. 1, 2027. While that study is underway, the bill also suspends certain related tax, penalty, and interest collections. The full bill text and amendments are available on the Maryland General Assembly website.
The Maryland...
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