Nonprofit hospitals can breathe a sigh of relief that a health-care overhaul proposed by Sen. Max Baucus doesn’t include an excise-tax measure that had been contemplated just a few months ago for hospitals not offering enough charity care. For months, nonprofit hospitals have feared minimum charity-care requirements after a set of options released in May by the Baucus-led Senate Finance Committee suggested Congress would take the tax route . The threat of a tax on nonprofit hospitals had come mostly from Republican Sen. Charles Grassley, who has been questioning for years the charitable — thus tax-exempt –- status of some nonprofits that pay executives huge corporate-like salaries and sue poor patients for payments, while amassing great wealth during the stock market’s boom years. Instead, the Baucus bill unveiled today adds four relatively benign requirements of hospitals, many of which have already adopted most of the practices. The requirements are: a periodic community needs assessment publicizing financial assistance policies limiting the billing

of patients who qualify for financial assistance and the prohibition of “extraordinary collection actions” “What the Baucus Bill proposes is a supplement to, rather than a replacement of, the community benefit standard and without the controversial excise tax and minimum patient charity care standards originally proposed by Senate Finance last May,” said Michael Peregrine, a health-care lawyer at McDermott Will & Emery LLP in Chicago. The community benefit standard is a 35-year-old, loosely defined requirement for hospitals to maintain their tax-exempt status. Different hospitals include different expenses in their reporting of community benefits — with some expenses having nothing directly to do with patient care. The American Hospital Association said it was still reviewing the details of the Baucus Bill and would provide comment later. For a detailed look at nonprofit hospitals, see WSJ articles here , here , here and here .

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Nonprofit Hospitals Dodge Excise-Tax Bullet in Baucus Bill