Senate panel advances bill capping nonprofit hospital charges at 300% of Medicare; excise tax starts 2027

The Senate Public Health Committee voted 7-4 on March 31 to advance Senate Bill 554, a proposal that would limit charges by nonprofit hospitals (excluding critical access and rural emergency hospitals) to no more than 300% of Medicare reimbursement and impose an excise tax on amounts billed above that threshold beginning in 2027.

The bill’s sponsor, Senator Greg Hertz, said the legislation is intended to address rising health care costs and price variation across Montana hospitals. “If Medicare reimburses you at a thousand dollars, you can't bill any more than $3,000,” Hertz told the committee during opening testimony. The measure would authorize audits by the Department of Public Health and Human Services and require hospitals to file community-benefit information (Schedule H from IRS Form 990). The Department of Revenue would administer the new excise tax, which would begin at 25% of the excess charge in 2027 and rise to 50% by 2030. Collected funds would be placed in a special revenue account: 65% for Montana Medicaid, 25% for workforce development serving rural areas, and up to 10% for department administration, according to the…