I

106TH CONGRESS

2D SESSION H. R. 5093

To amend title XVIII of the Social Security Act and the Internal Revenue

Code of 1986 to improve the ability of medical professionals to practice

medicine and provide quality care to patients by providing reimbursement

and a tax deduction for patient bad debt.

IN THE HOUSE OF REPRESENTATIVES

JULY 27, 2000

Mr. THORNBERRY introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend title XVIII of the Social Security Act and the

Internal Revenue Code of 1986 to improve the ability

of medical professionals to practice medicine and provide

quality care to patients by providing reimbursement and

a tax deduction for patient bad debt.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Patient Fairness and

5 Indigent Care Promotion Act of 2000’’.
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1 SEC. 2. RESTORATION OF BBA REDUCTION AND REIM2 BURSEMENT OF HOSPITALS FOR 100 PER3 CENT OF MEDICARE BENEFICIARY BAD DEBT.

4 Section 1861(v)(1)(T)(iii) of the Social Security Act

5 (42 U.S.C. 1395x(v)(1)(T)(iii)), as added by section 4451

6 of the Balanced Budget Act of 1997, is amended by strik7 ing ‘‘during a subsequent fiscal year’’ and inserting ‘‘dur8 ing fiscal year 2000’’.

9 SEC. 3. BAD DEBT DEDUCTION FOR CASH BASIS HEALTH

10 CARE PROVIDERS FOR UNPAID SERVICES

11 PROVIDED TO LOW-INCOME INDIVIDUALS.

12 (a) IN GENERAL.—Section 166 of the Internal Rev13 enue Code of 1986 (relating to bad debts) is amended by

14 redesignating subsection (f) as subsection (g) and by in15 serting after subsection (e) the following new subsection:

16 ‘‘(f) UNPAID MEDICAL CARE PROVIDED TO LOW-IN17 COME INDIVIDUALS.—

18 ‘‘(1) IN GENERAL.—In the case of a taxpayer

19 to whom this subsection applies, the deduction under

20 subsection (a) for worthless qualified medical care

21 debt shall not be less than 75 percent of the tax22 payer’s charge for such care.

23 ‘‘(2) TAXPAYER TO WHOM SUBSECTION AP24 PLIES.—This subsection shall apply to any taxpayer

25 who is engaged in the trade or business of providing

26 medical care other than as an employee and who
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1 used the cash receipts and disbursements method of

2 accounting.

3 ‘‘(3) QUALIFIED MEDICAL CARE DEBT.—For

4 purposes of this subsection, the term ‘qualified med5 ical care debt’ means any debt for medical care pro6 vided by the taxpayer to a low-income individual.

7 ‘‘(4) DETERMINATION OF CHARGE.—The

8 amount of the taxpayer’s charge which may be taken

9 into account—

10 ‘‘(A) shall not exceed the amount of the

11 charge that would be recognized for purposes of

12 title XVIII of the Social Security Act, and

13 ‘‘(B) shall not include any amount for

14 which the taxpayer is not entitled to reimburse15 ment from the low-income individual.

16 ‘‘(5) LOW-INCOME INDIVIDUAL.—For purposes

17 of this subsection, the term ‘low-income individual’

18 means an individual with a modified adjusted gross

19 income (as defined in section 34(c)(5)) below 135

20 percent of the income official poverty line (as de21 fined by the Office of Management and Budget, and

22 revised annually in accordance with section 673(2)

23 of the Omnibus Budget Reconciliation Act of 1981)

24 applicable to a family of the size involved.
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1 ‘‘(6) MEDICAL CARE.—For purposes of this

2 subsection, the term ‘medical care’ has the meaning

3 given to such term by section 213(d).’’

4 (b) EFFECTIVE DATE.—The amendment made by

5 this section shall apply to taxable years beginning after

6 the date of the enactment of this Act.

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