Hospitals fight federal charity care rules

Not-for-profit hospitals are rightly fearful that Congress will meddle with their tax exemption. If nothing else, Sen. Chuck Grassley (R-IA) has given them plenty of warning that their tax status was in danger, having focused his attention on the issue for years and frequently expressed the opinion that the system wasn't working.

Now, current health reform proposals could realize his threats. One of the policy options put on the table by Sen. Max Baucus (D-MT) and Grassley would require hospitals provide a minimum annual level of charitable care to get or keep their tax exemption, require non-profits to provide service regardless of ability to pay, and follow certain collections procedures.The two have both suggested that non-profits aren't doing enough to merit their exemptions. If they didn't follow these rules, hospitals could face excise taxes, or lose their exemption completely.

Of course, hospitals aren't taking this lying down. In fact, the industry is raising funds and energy to mount an all-out battle against proposals that would meddle with the rules governing charity care. The American Hospital Association is asking hospitals nationwide to contact Congress and ask their senators and representatives to oppose these proposals.

In reality, I'd submit that it's unlikely hospitals will be smacked with a loss of their tax exemption, despite all of the big talk, because I doubt Congress knows what would replace the current system. But if I was a non-profit hospital exec, heaven knows I'd be scared, nonetheless.

To learn more about this proposal:
- read this article in The New York Times

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