Not-for-profit hospitals scored a victory last week when the Senate Finance Committee excluded from its bill a stringent series of conditions to qualify as a not-for-profit hospital that had been passed earlier by the House Ways and Means Committee.
The Finance Committee victory is important because it gives hospital lobbyists leverage in their attempts to include a less onerous set of conditions when the bills from the House and Senate are brought together.
"Given that these are our two choices, the Senate version is far superior, and our next step is to work to get it included in the final bill," said Mike Rock, a lobbyist for the American Hospital Association.
At issue is the clarification of the 1969 Internal Revenue Service's definition of the community-benefit standard that hospitals must meet to qualify as not-for-profit facilities.
The House Ways and Means Committee version includes six conditions hospitals would have to satisfy. The most onerous, according to hospital lobbyists, would require hospitals to provide non-emergency-
room care to patients, regardless of their ability to pay, "to the extent of the organization's financial ability." All hospitals now are required to provide emergency services regardless of whether a patient can pay.
Hospital representatives say they have been given assurances by congressional staff that the provision would be limited to medically necessary services. Still, concern about the provision remains.
Another condition in the House plan would require 80% of the governing board of a not-for-profit hospital to be made up of people who don't receive compensation from the hospital.
The Ways and Means plan also includes a set of "intermediate sanctions" that could be levied against tax-exempt hospitals. Currently, a hospital can only lose its tax-exempt status. The House plan would allow not-for-profit hospitals to be fined the greater of $25,000 or 5% of its investment income for not meeting the tax-exempt conditions.
The Senate Finance Committee dropped all three provisions from its bill. That left it "pretty toothless," according to one House aide.
It also makes the lobbyists' job easier as they take their fight to the next level, the floors of the House and Senate.
"We are going to fight this one every step of the way because this would really change the way not-for-profit hospitals function," Mr. Rock said.