Congress has crafted a compromise tax reform bill based on the versions passed by the House and Senate. What are the implications for America’s hospitals and health systems?

As of press time, negotiations continue, but we continue to hear that senators are holding firm on their proposal to maintain the tax-exemption for private-activity bonds for hospitals. This protects hospitals’ and health systems’ access to a critical source of low-cost capital. We’re also thankful the bill maintains the ability of individuals with high medical expenses to continue to itemize their deductions. And we successfully worked to maintain current law on the treatment of charitable contributions and the community benefit standard. While we won’t know for certain until the final agreement is filed this evening, indications were that the definition of taxable income for purposes of calculating interest expense deductions reflects the House approach, at least in the initial years, close to what we had supported. The proposal in both bills to tax non-profit executive compensation will stay, though again the fate is unknown of the exception we sought for existing contracts or nonqualified deferred compensation plans for applicable tax-exempt organizations.

In addition, we’re deeply disappointed the bill also includes a provision to repeal the mandate that most individuals obtain health insurance. This will jeopardize coverage for millions of Americans and increase premiums for many more.

As you may know, the tax bill will add $1.5 trillion to the federal deficit over the next 10 years and, under the Budget Control Act, could technically trigger another sequester that would cut virtually all federal programs. Similar to the existing sequester, Medicaid is exempt and Medicare is considered a “protected program” with cuts limited to an additional 4 percent. However, we continue to push—and there appears to be a commitment—to waive this new sequester…which has been waived dozens of times in the past under similar circumstances. Be certain, we remain vigilant in ensuring this does not kick in! Regardless, Republican leaders on the House side have indicated a desire to undertake deficit reduction and entitlement reforms through different legislative approaches next year.

Of course, it’s not over until the last votes are cast—which will likely occur early next week. Please contact your legislators, particularly if they are Republicans, and urge them to address the issues outlined above.

Congress also must act next week to pass legislation to keep the government open past Dec. 22. We’re asking them to include measures important to America’s hospitals and health systems in this must-pass bill—like funding the Children’s Health Insurance Program, extending expiring Medicare provisions, stopping the harmful 340B cuts in the outpatient rule, stabilizing the private health insurance marketplace, and preventing so-called pay-go cuts to Medicare as a result of the tax bill. Hospitals—and their patients—need the certainty that the essential services they rely on will be there when they need them. At the same time, we will be appearing in federal court next Thursday to urge the court to prevent the Centers for Medicare & Medicaid Services from implementing the cut to 340B hospitals.

Moreover, we know that Congress will be hunting for revenue for year-end priorities. As always, Medicare payments to hospitals and health systems will be targets. We must stay vigilant and protect these critical programs from budget cuts. Please join us by continuing to reach out in reinforcing our concerns and advocacy messages with your legislators on these important issues.