Charity Care Legislation Passes in Committee

February 01, 2006

Healthcare Update

To read the original Client Update in PDF format, please click the Related Files link.

After a five-hour debate on February 14, 2006, both The Tax-Exempt Hospital Responsibility Act and The Fair Billing and Collection Practices Act were passed in committee by two 6-5 votes at the Health Care Availability and Access Committee Hearing and will now be heard by the Illinois House of Representatives.

House Amendment No. 1 made the following changes to The Tax-Exempt Hospital Responsibility Act:

  • Adds a definition of “Medicaid Inpatient Utilization Rate.”
  • Creates another exemption to the charity care requirements for a “safety net hospital,” defined as a freestanding hospital, unaffiliated with a health system, that has a Medicaid Inpatient Utilization Rate of 35% or greater. This is a significant threshold that many hospitals simply will not meet.
  • Provides that the Attorney General shall develop a rule that would allow certain qualified tax-exempt hospitals to be exempt from the charity care requirements if the hospital can demonstrate that compliance with those provisions will jeopardize the continued operation of the hospital; provides that there is no limit on the number of times a hospital can secure this exemption.
  • Changes the penalty provision from having the Attorney General’s Office receive and use all penalty amounts for enforcement purposes to requiring the Attorney General to, on an annual basis, use any remaining funds for a charity care grant program.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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