WASHINGTON -- The tax-exempt status of hospitals and health maintenance organizations, as well as the tax exemption for the billions of dollars of bonds that they issue each year, came under fire yesterday from House members and public interest groups at a hearing on health care reform.

Rep. Charles Rangel, D-N.Y., questioned the Clinton Administration's policy in its health care reform bill of largely preserving hospitals' 501(c)(3) tax status, saying the administration's proposed community benefit standards is not tough enough. The tax exemption of bonds issued by the hospitals is mostly derived from their 501(c)(3) status.

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