Tuesday, January 5, 2010
Senate Health Care Bill Imposes New Community Benefit, indigent Care, Collection Requirements on Charitable Health Care
I'm surprised not much is being said just yet about Section 9007 of the Patient Protection and Affordable Care Act pending in the Senate. That provision would impose new requirements on hospitals seeking tax exemption under IRC 501(c)(3). But then again, I doubt that anybody has actually read the bill in even small increments yet. But the provision appears to take on all the complaints directed against nonprofit health care over the last ten or fifteen years. In fact, Section 9007 is a rather astonishing overhaul of tax exemption for hospitals. Whether the provision is effective remains to be seen. I have only had time to skim the provision, but it looks like the provision (1) gives teeth to the idea of community benefit, by making hospitals actually determine and report on what the community needs, (2) requires tax exempt hospitals to implement a financial assistance program for indigent patients, (3) limits the amount it charges to indigent patients, and (4) limits the collection activities tax exempt hospitals can engage in. All of these requirements are proposed in a new IRC 501(r), the opening paragraph of which reads:.
(r) Additional Requirements for Certain Hospitals-
`(1) IN GENERAL- A hospital organization to which this subsection applies shall not be treated as described in subsection (c)(3) unless the organization--
`(A) meets the community health needs assessment requirements described in paragraph (3),
`(B) meets the financial assistance policy requirements described in paragraph (4),
`(C) meets the requirements on charges described in paragraph (5), and
`(D) meets the billing and collection requirement described in paragraph (6).