Health Care Reform Becomes Law

The House and Senate cleared the final piece of comprehensive health care reform, adopting a reconciliation measure (H.R. 4872) that makes adjustments to the bill President Obama signed into law. The reconciliation measure contains a few technical modifications to the originally passed health reform bill, including expanding the access of affordability tax credits for individuals and families to purchase health insurance. The package makes no changes to the additional requirements for nonprofit hospitals for tax exempt status in the original Senate bill.

The final bill contains the following provisions relevant to hospitals/medical centers:

• Community Needs Assessment requirement (once every three years).
• Financial Assistance Policy requirement.
• Review of tax-exempt hospitals by the IRS (once every three years).
• Annual review of tax-exempt hospitals provision of charitable care, bad debt and the unreimbursed cost of means-tested & non-means-tested government programs by the Treasury and HHS.

The bill also adds a new section 4959 to the Internal Revenue Code which imposes an excise tax penalty of $50,000 for any nonprofit hospital that fails to satisfy the community health needs assessment.

The final bill does not limit the tax deductibility of charitable gifts.