Week in Insights: Indiana Bill Sets Path to Curbing Health Costs

Indiana lawmakers introduced a bill last month that could set a precedent for other states looking to rein in health-care costs. The proposed law would strip nonprofit hospitals of their tax-free benefits if they are found to have charged commercially insured patients more than 200% of what Medicare pays for the same underlying services.

This policy reform follows a simple principle: If a nonprofit hospital acts like a for-profit business, it should be taxed like one.

The bill responds to a growing crisis in Indiana’s health-care system, where hospital costs have soared. A recent investigation found that one hospital was charging among the highest prices in the country and paying a retired CEO more than $5 million a year—while enjoying preferential tax treatment through its nonprofit status.

Stakeholders have countered that such a bill could lead to reduced services or hospital closures. But this argument ignores that charging exorbitant rates for services can deprive individuals of medical care as easily as facility closures. If nonprofit hospitals are truly committed to their public benefit mission, they should support keeping prices at reasonable levels.

Indiana’s approach won’t fix everything wrong with the US health-care system, but it offers a potential framework for curbing hospital monopolies and health-care pricing. If more state lawmakers follow Indiana’s lead, we might see a shift in how nonprofit hospitals operate.

—Andrew Leahey

Welcome to the Week in Insights for Bloomberg Tax’s latest analysis and news commentary. This week, experts examined the IRS’s processing rate for employee retention credit claims, proposals to limit a tariff exemption on low-value shipments, and more.

Insights

Pillsbury’s Joshua Becker and Michael Kosnitzky examine possible shifts in SEC compliance and tax treatment, adding that private placement life insurance is ripe for guidance.

Davies’ Ian Caines, Sabina Han, and Michael Kandev say an ordinarily sound policy in Canada is now creating a dilemma in an announced, but not enacted, capital gains tax increase, likely leaving many taxpayers dissatisfied with the results.

Taxand’s Christos Theophilou explains the impact of the tax reforms in Cyprus and says in-scope groups must evaluate their business operations to prepare for the changes.

Covington’s Lauren Ann Ross assesses the transfer pricing impact of President Donald Trump’s orders, saying that Notice 2025-04 could remain relevant even if the IRS withdraws it.

Fox Rothschild’s Matthew Lee, Brian Bernhardt, and Jonathan Wasser say the IRS should increase its processing rate for employee retention credit claims, noting that confirmation of Billy Long could change the agency’s “anti-ERC” tone.

Jones Walker’s Jay Adams and Joshua Sanchez-Secor analyze HB 7, a Louisiana ballot measure going to voters March 29 that could require corporations to pay ad valorem tax on inventory to parishes.

Law school dean A. Benjamin Spencer says ABS law firms can expand legal access and that concerns over nonlawyers undermining client interest seem overblown.

RSM’s Jodi Ader says proposals to limit a tariff exemption on certain shipments could increase costs for businesses and consumers—and could give companies more administrative headaches.

Chamberlain Hrdlicka’s Jasen Hanson examines issues in Commissioner v. Zuch, noting that a ruling favoring the IRS could move tax collection cases to pricier district courts.

Columnist Corner

Technically Speaking design by Jonathan Hurtarte/Bloomberg Tax

States seeking to tax digital advertising should collaborate on a uniform approach, Andrew Leahey argues in his latest Technically Speaking column, adding that patchwork laws “could hinder innovation and disproportionately impact smaller businesses.”

The Streamlined Sales and Use Tax Agreement is a good model for such an initiative, which could standardize criteria for taxable activities and revenue thresholds to simplify compliance, Andrew says. Read More

News Roundup

From Telework to Firing: How Trump Orders Could Hit IRS Workers

President Donald Trump’s directives to gut the federal workforce come days into tax filing season—the busiest time of the year for the IRS. Read More

OECD Lessens Reporting Burden for Tax Risk Assessment Program

Applying for the global tax risk assessment program just got a bit easier for multinationals this week after the OECD removed a requirement for them to provide a country-by-country reporting self-assessment. Read More

Missouri Governor Seeks to Phase Out Individual Income Tax

Missouri Gov. Mike Kehoe asked lawmakers to work with him to phase out the state’s personal income tax. Read More

IRS Push to Tackle Covid-Era Claim Backlog Threatened by Lawsuit

A lawsuit challenging the IRS’s automated system for processing employee retention credit requests is threatening to upend the agency’s plan to make a sizable dent in the more than one million outstanding claims. Read More

Tax Management International Journal

US citizens residing in Europe must consider the potential for estate and inheritance tax exposure by both the European country as well as the US, Arielle Tucker of Connected Financial Planning says.

Alexandra Minkovich of Baker McKenzie discusses the fate of the corporate alternative minimum tax and the path forward for the new administration’s proposed CAMT regulations.

Tax Management Memorandum

Puerto Rico benefits and compensation attorney Carlos Gonzalez discusses the evaluation of the cybersecurity measures of insurance companies servicing health-care and welfare benefit plans operating in Puerto Rico.

High-net-worth individuals should consider establishing an optimized gift trust to lock in historically high gift and estate tax exemptions before they expire at the end of the year, says Frazer Ryan Goldberg & Arnold’s Jonathon Morrison.

Career Moves

Eduardo Cukier joined Kostelanetz as counsel in New York.

Michael Educate joined Thompson Coburn as a partner in its business litigation practice group in Chicago.

Ryan Whitaker joined Frost Brown Todd as a partner in Cincinnati.

Marcus Brooks joined Jackson Walker as a partner in its tax practice group.

Christopher Mangin joined Paul Hastings as a REIT tax partner in Washington.

Craig Cohen joined Dechert as a partner in its global tax group in New York.

Zina Saeed joined CliftonLarsonAllen as general counsel in Chicago.

Simon Weppner joined Norton Rose Fulbright as a partner in its tax practice in Düsseldorf, Germany.

Kevin Spencer joined White & Case as a partner in its global commercial litigation practice and global tax practice in Washington.

Catherine Hill joined White & Case as a partner in its global tax practice and global private equity industry group in London.

Jonathan Landon joined Fredrikson as a shareholder in its business and tax planning, trusts and estates and nonprofit and tax exempt organizations groups.

If you’re changing jobs or being promoted, send your submission to TaxMoves@bloombergindustry.com for consideration.