Investors Business Daily posted this story online August 13 that suggests “If a charitable hospital treats a homeless person who staggers into the emergency room without insurance, it may be punished with taxes and fines."

IBD explains this is because a federal law known as EMTALA requires charitable hospitals to treat a minimum number of patients who can't pay.   If a hospital does not comply the EMTALA penalty is loss of tax-exempt status.  Yet ObamaCare requires everyone to have health coverage so in theory, after January 1, 2014 there won’t be any more patients who can’t pay.  This means charitable hospitals may have a hard time avoiding an EMTALA violation after January 1, 2014.   How will they keep their tax-exempt status?

The obvious way is for Congress to amend EMTALA.  But as a practical matter, I don’t think the federales will enforce the EMTALA penalty even if it’s not amended.

Why not?

Because if a charitable hospital treated only “a homeless person” i.e., some meaningless handful of non-paying patients, is it reasonable to believe IRS would act?  I think not.

On the other hand, I also doubt IRS would act if a charitable hospital treated a meaningful number of non-paying persons.  A public dispute over this puts IRS squarely on the side of denying treatment.  That would embarrass the IRS and the administration.  Even worse, it would reveal the continuing existence of a large number of uninsured people.  That of course would (1) discredit Obamacare, and (2) politically embarrass Obama . . . because he has promised America for years that his signature health plan will fix the uninsured problem.

So I doubt the conflict between EMTALA and Obamacare will have any material affect on any particular charitable hospital.

One other observation about the information reported by IBD:

Obamacare requires each charitable hospital to file a report to IRS once every 3 years "to prove that the charitable hospital is still needed in their geographical area."  And if IRS deems the hospital not needed?  Will it be forced to close?  As a matter of fact, no.  It will be forced to convert to a for-profit status.  That;s because it's not needed as a not-for-profit but still very much needed as a for-profit.  See?
 
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