Proposal would limit nonprofit hospital charges and tax high bills

The proposed text would limit charges by certain nonprofit hospitals. It covers nonprofit hospitals that are not critical access hospitals or rural emergency hospitals. The limit applies to Medicare-eligible services or items. The proposed act would take effect December 31, 2026.

The proposed text would tax certain charges above 300% of the Medicare reimbursement rate and direct how the money may be used. It covers nonprofit hospitals and patients who are not enrolled in Medicare or Medicaid. The tax would apply when a nonprofit hospital charges a patient who is not enrolled in Medicare or Medicaid more than 300% of the Medicare rate for a Medicare-eligible service or item. The tax would be 25% of the excess in 2027, 35% in 2028, 45% in 2029, and 50% from 2030 onward. The tax would apply to services provided after December 31, 2026.

The proposed text would require certain nonprofit hospitals to report information about their finances. Nonprofit hospitals, critical access hospitals, and rural emergency hospitals would report to the state health department and a legislative committee. Reports could not be redacted except to protect personally identifiable information or when federal health privacy law requires it. Reports would be due by September 1 each year and include the hospital’s previous taxable year.