The Senate Finance Committee yesterday voted 14 to 9 to approve its version of a health care reform package, which would place increased reporting requirements on bond-financed and other nonprofit 501(c)(3) hospitals.

The legislation is now headed to the Senate floor for the next round of votes.

The bill, drafted by Finance Committee chairman Max Baucus, D-Mont., would require nonprofit hospitals to conduct regular assessments of community health needs, implement financial assistance programs, and limit how much they bill certain patients and how far they can go to collect the money.

Every hospital would be required to conduct a community health needs assessment at least once every three years with input from representatives of its community and would have to adopt a strategy to address whatever needs are identified.

The hospital would have to report how it is addressing those needs to the Internal Revenue Service in its Form 990, the annual information return filed by charitable organizations.

Failure to complete such an assessment would result in a penalty of up to $50,000. Failure to disclose how the hospital is meeting its needs would result in the penalties that currently exist for incomplete tax returns.

Each nonprofit hospital also would be required to adopt and publicize a financial assistance policy that would ensure universal access to emergency care. The policy would have to clearly state the eligibility criteria for financial assistance and the basis for calculating the charges to be billed to the patients who qualify for it.

In addition, hospitals could only charge patients requiring financial assistance the amounts they charge insured patients. And they would not be permitted to pursue extraordinary collection actions against a patient — including lawsuits and arrests — without first making reasonable attempts to inform the patient of their financial assistance programs.

Once the legislation is taken up by the full Senate, Sen. Maria Cantwell, D-Wash., is expected to introduce an amendment that would permit fixed-wing air ambulances to be financed with tax-exempt bonds. Current law prohibits the use of tax-exempt bonds for the purchase of any airplanes, including air ambulances.

Cantwell introduced the legislation earlier this month with plans to add it to Baucus’ bill, but did not offer it for consideration because its costs had not been scored by the Joint Committee on Taxation yet. Her staff said last week that the amendment will be offered to the bill when the full Senate takes it up.

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