WASHINGTON -- Health care reform legislation introduced this week by Rep. Sam Gibbons would add new community-benefit standards for 501(c)(3) organizations and appears to propose federal guarantees for certain types of hospital bonds.
The bill sets the stage for the Florida Democrat's debut as acting chairman of the House Ways and Means Committee on Thursday. It will be the panel's first meeting since Rep. Dan Rostenkowski, D-Ill., was indicted on fraud and embezzlement charges May 31 and had to relinquish his chairmanship. The committee will resume the process drafting a health care package.
However, Gibbons' bill does not appear to include a trio of provisions supported by the Public Securities Association and 501(c)(3) issuers that would expand health care advance refundings and bank deductibility, and eliminate a cap on the amount of bonds that individual health care institutions may have outstanding.
The core of the Gibbons' bill is a bill approved by the Ways and Means subcommittee on health in March. Gibbons modified that bill by, among other things, proposing that 501(c)(3) organization adhere to standard that were not in the subcommittee bill or in President Clinton's health care plan.
Under Gibbons' bills, a 501(c)(3) health care organization would be required to do the following.
* provide significant outreach services to the community in which it is located;
* assess annually the community's need and develop a written plan stating how the organization plans to meet those needs;
* be willing to accept as patients individual who are not covered by a government-sponsored health plan
* avoid denying emergency medical treatment to the poor;
* to the extent of its financial ability, provide non-emergency health care without regard to the patient's ability to pay; and
* maintain an independent board of directors.
The bill also states that in the event an institution failed to meet these standards, it would not automatically los its tax-exempt status. Instead, the institution would be assessed an excise tax penalty.
Congressional aides said the new standard proposed by Gibbons build on existing requirements, and some are already familiar to 501(c)(3) issuers because they merely codify existing Internal Revenue Services rulings.
Lobbyists, meanwhile, said that at first blush the new standards do not appear to be overly burdensome, but they planned to study the standards in more detail before passing judgment.
Micah Green, the executive vice-president of the PSA, said he was "encouraged that the bill seems to recognize the continuing ongoing importance of nonprofit institutions in delivering health care. We have to study further the specific standards outlined in the proposals."
On another issue, Gibbons appears to have included in his bill a provision from the subcommittee measure designed to permit federal guaranteed tax-exempt bonds to be issued for health care institutions serving urban and rural areas with inadequate access to medical services.
In the subcommittee bill, the guarantees for bonds were in a section that would create an Essential Community Provide program to aid medically underserved areas in cities and in rural areas.
To set up the program's health care facilities, the federal government would offer loans, loan guarantees, and interest rates subsides for projects involving tax-exempt financing. Under current law, such pledges of federal support amount to a federal guarantee of tax-exempt debt, which was banned by Congress in 1984.
A summer of Gibbons' bill states that it retains the overall essential provider program, renamed the Community Health Network Grant program. The summary is silent on the subject of the federal guarantees for bonds. A detailed version of Gibsons' bill is not expected to be release until today or Thursday.
But a congressional aides familiar with the federal guarantee provision said his understanding is that Gibbons' bill retains it. Committee staff members were still expected to make last-minute changes to the bill Tuesday night, but when details of the measure are released later this week, "it's a good bet [[the provision] is going to be in there," the aide said.