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Hospitals All Clear With Bill's Meager Charity Care Requirements

Philip Betbeze, for HealthLeaders Media, September 25, 2009

Unveiled last week, Senate Finance Committee Chairman Max Baucus' bill seems the last best hope for the Democrats' version of healthcare reform.

So assuming some form of legislation that purports to reform healthcare eventually gets passed this fall, and that it's based on Baucus' bill, nonprofit hospitals will have dodged a major bullet.

Healthcare reform has been analyzed to death, but buried within the Baucus bill are some new requirements for hospitals to meet charity care standards, which are currently very loose and subject to interpretation. Looks like they'll stay that way.

In the recent past, both Baucus and the Finance Committee's ranking Republican senator, Chuck Grassley, have largely agreed that many hospitals shirk their duties to provide charity care to those who can't afford it essentially because the 35-year-old guidelines are so opaque and toothless. Both senators, but especially the Republican Grassley, have garnered positive populist publicity from their efforts to shine the light on the murky practice of accepting tax exemptions on one hand and aggressively collecting payments from patients who should qualify for charity care on the other.

Grassley and Baucus have even brought the IRS into the effort, but much of the additional scrutiny they've instituted, has—and my apologies to the Bard for mangling his prose—amounted to much sound and fury that signified very little. This was the chance to the law behind their harsh words, and Baucus, as the bill's author, whiffed. Neither Grassley, nor any other Republican, is supporting the bill.

Never mind that some hospitals go above and beyond what it means to provide charity care and community benefit, while others pay little more than lip service to doing so. The good news for hospitals is that unless you're putting your medical debtors in the public pillory, you're likely OK under the new legislation that requires hospitals to do little more than most are already doing.

The Baucus bill requirements are:

  • a periodic community needs assessment
  • publicizing financial assistance policies
  • limiting the billing of patients who qualify for financial assistance
  • the prohibition of "extraordinary collection actions"

Hmph. Lots of weasel words in there. Who's to say what "extraordinary" is? How often is "periodic?" The Baucus legislation is a major disappointment to those who hoped to hold hospitals accountable for their tax exemptions, and is a big departure from earlier Senate Finance Committee proposals that would have added minimum charity care standards and an excise tax on hospitals and health systems that didn't meet those standards, in an effort to level the playing field.

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