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Ways and Means Chairman Kevin Brady (R-TX) today unveiled House Republican leaders’ proposal to reform the tax code. Among other changes, the would eliminate hospitals’ ability to access low-cost capital financing through tax-exempt private activity bonds. In addition, the bill would impose a 20% excise tax on pay for certain hospital employees. The bill would not make changes to tax exemption for not-for-profit hospitals. In the area of changes to the personal tax code, the bill would repeal the itemized deduction of medical expenses beginning next year, and eliminate the deduction for contributions to Archer medical savings accounts. The bill does not make any changes to the Affordable Care Act’s individual mandate or individuals’ ability to itemize deductions for charitable giving. “For many communities, tax-exempt financing, such as private activity bonds, has been a key to maintaining vital hospital services,” AHA Executive Vice President Tom Nickels noted in a statement. “If hospital access to tax-exempt financing is limited or eliminated, hospitals’ ability to make investments in new technologies and renovations in the future will be challenged. At the same time, we are pleased the proposal maintains current policy on charitable contributions that are critical to funding the services that patients need. In addition, we are concerned about the proposed 20% excise tax for certain hospital employee compensation. There is already a rigorous process prescribed by the Internal Revenue Service for setting up executive compensation. The process requires an impartial panel drawn primarily from the board of trustees, which is charged with setting CEO compensation based on the marketplace and documenting deliberations to attract the best talent. Finally, we are troubled that the proposal would eliminate an important deduction for people with high medical costs… As Congress engages in the important work of reforming the nation’s tax code, we urge them to retain tax code incentives and fair treatment for hospitals that continue to work to provide access to health care in communities all across the country.”