The Senate Finance committee, led by Chuck Grassley (R-Iowa) and Max Baucus (D-Montana), is proposing a new enforcement mechanism for tax-exempt hospitals under which hospitals would have to provide certain levels of community benefit. For example, a tax-exempt hospital would be required to provide charity care equal to an as-yet unspecified percentage of its patient revenue. Also, under the proposal, tax-exempt hospitals could not refuse to provide service based on a patient’s ability to pay and would have to follow certain procedures before instituting collection actions against patients. If the tax-exempt hospital violates the charity care standards, the government could impose excise taxes or ultimately revoke its tax-exempt status. See the full text of the Finance committee’s proposed health system savings and revenue options here. The proposed requirements for tax-exempt hospitals begin on page 31 of the document.
The American Hospital Association opposes the one-size-fits-all standard and in a May 28, 2009 bulletin, urged hospital leaders to contact their senators to oppose the proposed charity standards. The AHA’s bulletin is available here (available to AHA members only).