The outgoing chairman of the House Ways and Means Committee says tax-exempt hospitals should earn their tax breaks.
Rep. William Thomas, R-Calif., has introduced H.R. 6420, the Tax Exempt Hospital Responsibility Act, a bill that would limit nonprofit hospitals to charging $25 per medically necessary visit for uninsured individuals with annual household incomes up to 100% of the federal poverty level for that individual’s area.
A hospital that violates the rule might have to pay a tax of $1,000 for each violation, according to the bill text.
For individuals in households with incomes of 100% to 200% of the federal poverty level, a nonprofit hospital would have to limit care to the average amount paid to the hospital under carriers with private health insurers.
Under current law, a nonprofit hospital must meet a “community benefit standard” to qualify for a tax exemption, but the hospital does not have to provide a minimum level of charity care, Thomas says.
“This legislation would create a more level playing field among hospitals,” Thomas says in a statement about the proposed bill.
Thomas says he hopes the bill will help start conversations about nonprofit hospital charity care in the next Congress.
Thomas and other lawmakers have been looking at topics such as charity care at nonprofit hospitals and the high prices that hospitals often charge uninsured patients for several years.
Researchers at the Congressional Budget Office recently looked at hospital “uncompensated care” data for hospitals in California, Florida, Georgia, Indiana and Texas to analyze differences between the care provided at nonprofit and for-profit hospitals.
The CBO researchers found that uncompensated care accounted for an average of 4.2% of care provided in 2003 at the for-profit hospitals studied; 4.7% at the nonprofit hospitals; and 13% at the hospitals owned by state and local governments.
Uncompensated care accounted for 20% to 30% of care at significant numbers of the hospitals owned by state and local governments, but almost none of the for-profit or nonprofit private hospitals reported that uncompensated care constituted more than 10% of the care they provided, the CBO researchers write in a discussion of their analysis.
The CBO researchers checked to see whether the nonprofit hospitals were more likely than the for-profit hospitals to be in troubled communities.