I 111th CONGRESS 1st Session H. R. 2786 IN THE HOUSE OF REPRESENTATIVES June 10, 2009 Mr. Thornberry 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 improve the ability of medical professionals to practice medicine and provide quality care to patients by providing a tax deduction for patient bad debt.

1.

Short title

This Act may be cited as the Patient Fairness and Indigent Care Promotion Act of 2009.

2.

Bad debt deduction for cash basis health care providers for unpaid services provided to low-income individuals

(a)

In General

Section 166 of the Internal Revenue Code of 1986 (relating to bad debts) is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection: (f)

Unpaid medical care provided to low-income individuals

(1)

In general

In the case of a taxpayer to whom this subsection applies, the deduction under subsection (a) for worthless qualified medical care debt shall not be less than 75 percent of the taxpayer’s charge for such care. (2)

Taxpayer to whom subsection applies

This subsection shall apply to any taxpayer who is engaged in the trade or business of providing medical care other than as an employee and who used the cash receipts and disbursements method of accounting. (3)

Qualified medical care debt

For purposes of this subsection, the term qualified medical care debt means any debt for medical care provided by the taxpayer to a low-income individual. (4)

Determination of charge

The amount of the taxpayer’s charge which may be taken into account— (A)shall not exceed the amount of the charge that would be recognized for purposes of title XVIII of the Social Security Act, and (B)shall not include any amount for which the taxpayer is not entitled to reimbursement from the low-income individual. (5)

Low-income individual

For purposes of this subsection, the term low-income individual means an individual who, at the time the medical care attributable to the debt is provided, has an annual household income below 135 percent of the poverty line (as defined in section 673 of the Community Services Block Grant Act (42 U.S.C. 9902)) applicable to the size of the family involved. (6)

Medical care

For purposes of this subsection, the term medical care has the meaning given to such term by section 213(d). (7)

Regulations

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations providing for methods of establishing that an individual is a low-income individual for purposes of this section. (b)

Effective date

The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.