As Congress continues to scrutinize how to change the tax code regarding the regulation of non-profit organizations, the American Hospital Association submitted its proposals to the Senate Finance Committee on what the government should retain and change.
Although the committee is considering how to overhaul the tax code as a whole, non-profit hospitals have come under fire for some of its charity care practices. This prompted the Internal Revenue Service last year to establish new rules regarding how to account for charity care.
According to a lengthy letter AHA Executive Vice President Rick Pollack sent to Committee Chairman Max Baucus (D-Mont.), non-profit hospitals want to have inexpensive, tax-exempt financing above all else.
"More costly alternatives, such as taxable bonds and bank loans, are out of reach for many community hospitals," Pollack wrote. "If hospital access to tax-exempt financing is limited or eliminated entirely, the result could be devastating for both patients and their communities."
Pollack did note that the AHA would support the use of direct-pay bonds so long as their costs were comparable to tax-exempt issues.
Pollack also defended the current community benefit standards as defined by the Internal Revenue Service. He cited several unique ways hospitals provide community benefits, including initiatives to treat mental illness, childhood obesity and diabetes in rural areas.
Pollack also urged that Congress retain the current tax deduction for charitable deductions and impose no limits on giving. He claimed any limitations, no matter how slight, could costs hospitals as much as $1 billion a year in donations.
According to a statement, Baucus's committee said it has received more than 10,000 comments regarding how the government should reform the tax code, and would likely move forward a sweeping tax reform bill this fall.
To learn more:
- read Pollack's letter (.pdf)
- check out the Senate Finance Committee statement