Rep. Jim McDermott, MD, (D-Wash.), the ranking member of the House Ways and Means Committee's health subcommittee, wrote a letter to the Treasury Department urging that the Internal Revenue Service expand safe harbor regulations on tax-exempt bond terms for hospitals embarking on innovative payment models, such as bundled payments.
"The safe harbors are narrow and…limit the types of permissible compensation arrangements and may not address innovative payment methods such as payment bundles." Rep. McDermott said in the letter.
He argued that because providers know the IRS is "closely scrutinizing" safe harbor issues related to tax-exempt bond financing arrangements, "stakeholders may have some anxiety with entering into new and innovative arrangements encouraged by the [Patient Protection and] Affordable Care Act."
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