I 
109TH CONGRESS 
2D SESSION 
H. R. 6420 
To amend the Internal Revenue Code of 1986 to impose an excise tax 
on certain medical care providers that fail to provide a minimum level 
of charity medical care, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 8, 2006 
Mr. THOMAS introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to impose 
an excise tax on certain medical care providers that 
fail to provide a minimum level of charity medical care, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Tax Exempt Hospitals 
Responsibility Act of 2006’’. 
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SEC. 2. REQUIRED POLICIES AND PROCEDURES OF SPECI-
FIED MEDICAL CARE PROVIDERS. 
(a) IN GENERAL.—Section 501 of the Internal Rev-
enue Code of 1986 (relating to exemption from tax on cor-
porations, certain trusts, etc.) is amended— 
(1) by redesignating subsection (r) as sub-
section (s), and 
(2) by inserting after subsection (q) the fol-
lowing new subsection: 
‘‘(r) POLICIES
AND PROCEDURES
OF SPECIFIED 
MEDICAL CARE PROVIDERS.— 
‘‘(1) IN
GENERAL.—A specified medical care 
provider shall not be treated as described in section 
501(c)(3) unless such provider has adopted, and 
normally operates consistently with, policies and pro-
cedures for providing, and charging for, specified 
medically necessary care to low-income uninsured in-
dividuals consistent with the requirements of sub-
chapter H of chapter 42. 
‘‘(2) DENIAL
OF
DEDUCTION.—No deduction 
shall be allowed under any provision of this title, in-
cluding sections 170, 545(b)(2), 556(b)(2), 642(c), 
2055, 2106(a)(2), and 2522, with respect to any 
contribution to an organization which is not de-
scribed in section 501(c)(3) by reason of paragraph 
(1). 
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‘‘(3) DEFINITIONS.—Terms used in this sub-
section shall have the same meanings as when used 
in subchapter H of chapter 42, except that with re-
spect to the term ‘specified medical care provider’ 
clause (i) of section 4968C(1)(A) shall not apply.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 3. FAILURE BY SPECIFIED MEDICAL CARE PROVIDER 
TO MEET MINIMUM CHARITY CARE REQUIRE-
MENT. 
(a) IN GENERAL.—Chapter 42 of the Internal Rev-
enue Code of 1986 (relating to private foundations and 
certain other tax-exempt organizations) is amended by 
adding at the end the following new subchapter: 
‘‘Subchapter H—Failure by Specified Medical 
Care Provider To Meet Minimum Charity 
Care Requirements 
‘‘Sec. 4968. Excise tax on specified medical care provider for failure to provide 
specified medically necessary care. 
‘‘Sec. 4968A. Excise tax on specified medical care provider for overcharging for 
specified medically necessary care. 
‘‘Sec. 4968B. Excise tax on specified medical care provider for failure to dis-
close charitable medical care information and negotiated 
charges. 
‘‘Sec. 4968C. Definitions. 
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‘‘SEC. 4968. EXCISE TAX ON SPECIFIED MEDICAL CARE PRO-
VIDER FOR FAILURE TO PROVIDE SPECIFIED 
MEDICALLY NECESSARY CARE. 
‘‘If a specified medical care provider fails to provide 
specified medically necessary care to a low-income unin-
sured individual who seeks such care from such provider 
in an in-person visit, there is hereby imposed on such pro-
vider a tax equal to $1,000 for each such failure. 
‘‘SEC. 4968A. EXCISE TAX ON SPECIFIED MEDICAL CARE 
PROVIDER FOR OVERCHARGING FOR SPECI-
FIED MEDICALLY NECESSARY CARE. 
‘‘(a) IMPOSITION OF TAX.—If a specified medical 
care provider collects from a low-income uninsured indi-
vidual an amount in excess of the maximum allowed 
charges for specified medically necessary care provided to 
such individual, there is hereby imposed a tax on such pro-
vider in an amount equal to 3 times such excess. 
‘‘(b) MAXIMUM ALLOWED CHARGES.—For purposes 
of this section, the term ‘maximum allowed charges’ 
means— 
‘‘(1) with respect to a low-income uninsured in-
dividual whose annual household income is not more 
than 100 percent of the poverty line applicable to 
the size of the family involved, $25 for each visit, 
and 
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‘‘(2) with respect to a low-income uninsured in-
dividual whose annual household income is more 
than 100 percent, but not more than 200 percent, 
of the poverty line applicable to the size of the fam-
ily involved, the average amount paid to the specified 
medical care provider for such medical care under 
contracts with private health insurers. 
‘‘SEC. 4968B. EXCISE TAX ON SPECIFIED MEDICAL CARE 
PROVIDER FOR FAILURE TO DISCLOSE CHAR-
ITABLE MEDICAL CARE INFORMATION AND 
NEGOTIATED CHARGES. 
‘‘(a) IMPOSITION OF TAX.—If a specified medical 
care provider fails to meet the requirements of subsection 
(b), there is hereby imposed a tax on such provider equal 
to $1,000— 
‘‘(1) for each such failure with respect to a re-
quirement described in subsection (b)(1), and 
‘‘(2) for each day on which such failure oc-
curred with respect to a requirement described in 
subsection (b)(2). 
‘‘(b) DISCLOSURE OF CHARITABLE MEDICAL CARE 
INFORMATION AND MEDICAL CARE PRICE DATA.— 
‘‘(1) DISCLOSURE TO PATIENTS.—The require-
ments of this paragraph are met if the specified 
medical care provider discloses its policies with re-
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spect to providing, and charging for, specified medi-
cally necessary care— 
‘‘(A) in the patient admission process, and 
‘‘(B) in any attempt by the provider to 
charge for medical care provided, and 
‘‘(2) DISCLOSURE
TO
PUBLIC.—The require-
ments of this paragraph are met if the specified 
medical care provider makes available to the pub-
lic— 
‘‘(A) its policies with respect to providing, 
and charging for, specified medically necessary 
care, and 
‘‘(B) a list of the average prices actually 
paid to the provider for each procedure or serv-
ice, grouped by private health insurance, self- 
pay, and governmental health programs. 
‘‘(c) MAXIMUM TAX.—The amount of tax imposed 
under subsection (a)(2) with respect to each failure shall 
not exceed $50,000. 
‘‘SEC. 4968C. DEFINITIONS. 
‘‘For purposes of this subchapter— 
‘‘(1) SPECIFIED MEDICAL CARE PROVIDER.— 
‘‘(A) IN
GENERAL.—The term ‘specified 
medical care provider’ means an organization 
which— 
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‘‘(i) is described in section 501(c)(3), 
‘‘(ii) has as its principal purpose the 
provision of medical or hospital care, 
‘‘(iii) has as its principal purpose the 
provision of medical education or medical 
research and is actively engaged in pro-
viding medical or hospital care, or 
‘‘(iv) is required under State law to be 
licensed as a hospital. 
‘‘(B) EXCEPTIONS.—Such term shall not 
include a convalescent home or a home for chil-
dren or the aged. 
‘‘(2) 
SPECIFIED
MEDICALLY
NECESSARY 
CARE.— 
‘‘(A) IN
GENERAL.—The term ‘specified 
medically necessary care’ means any medical 
care which is within the scope of medical care 
provided by the specified medical care provider. 
‘‘(B) EXCEPTIONS.—Such term shall not 
include— 
‘‘(i) any medical care— 
‘‘(I) which is attested to by the 
physician or practitioner treating the 
low-income uninsured individual as 
being not medically necessary, or 
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‘‘(II) with respect to which the 
low-income uninsured individual signs 
a waiver acknowledging such care is 
not medically necessary, and 
‘‘(ii) any organ transplant, any med-
ical care that is cosmetic or experimental 
in nature, and any treatment to improve 
the functioning of a malformed member. 
‘‘(3) LOW-INCOME UNINSURED INDIVIDUAL.— 
‘‘(A) IN GENERAL.—The term ‘low-income 
uninsured individual’ means any individual who, 
at the time the medical care is sought— 
‘‘(i) is not covered by insurance con-
stituting medical care, other than coverage 
described in section 223(c)(1)(B), 
‘‘(ii) has an annual household income 
equal to not more than 200 percent of the 
poverty line applicable to the size of the 
family involved, 
‘‘(iii) does not fail the resource re-
quirement of subparagraph (D) or (E) of 
section 1860–14(a)(3) of the Social Secu-
rity Act, 
‘‘(iv) is a citizen or resident of the 
United States, and 
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‘‘(v) is not eligible for government- 
sponsored insurance constituting medical 
care. 
‘‘(B) EXCEPTION.—An individual shall not 
be a low-income uninsured individual if the in-
dividual fails to comply with reasonable re-
quests by a specified medical care provider to 
provide documentation, or make an attestation, 
regarding income, assets, citizenship or resi-
dency, or insurance status. 
‘‘(4) POVERTY LINE.—The term ‘poverty line’ 
has the meaning given such term in section 673 of 
the Community Services Block Grant Act (42 U.S.C. 
9902).’’. 
(b) CONFORMING AMENDMENT.—The table of sub-
chapters for chapter 42 of such Code is amended by add-
ing at the end the following new item: 
‘‘SUBCHAPTER H. FAILURE BY SPECIFIED MEDICAL CARE PROVIDER TO MEET 
MINIMUM CHARITY CARE REQUIREMENT.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
Æ 
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