Tax Relief Measures for Physicians

With all the health care changes what about compensating doctors for care given to indigents? Tax credits and tax deductions are meant to raise money for the community as well as reward good behavior and penalize bad behavior. Uncompensated care is defined as health services that are delivered but not paid for by either public or private insurance our out of pocket payments. Uncompensated care is financed through Medicaid, Medicare type payments, and other supplemental programs. Uncompensated care is also charitable care which is care given with no expectation of repayment. Uncompensated care may also be characterized as bad debt care which is care with the expectation of being paid for but not being received. Data suggests that the amount of bad debt far exceeds that of charitable debt.

Efforts to obtain legislation to enact tax deductions for uncompensated care to the indigent have been successful. One reason being to add a new tax deduction to the federal tax code to reduce revenue would be political suicide. There is also no provision in the tax code to cover such a deduction which would not qualify for a charitable donation afforded when giving to a charity under section 526 of the Internal Revenue Code. Offering this deduction would also create a precedent with which other professionals would seek a similar deduction for uncompensated care.

Targeted tax relief such as tax relief measures for physicians would create more governmental and compliance costs for physicians to be subject to. Most importantly, creating a tax relief policy will go against the time honored tradition of physicians providing for the indigent as a principle. It may be that by requiring more individuals to have health insurance physicians will eventually get paid for more of the care they provide by the shear fact that more people will have insurance for payment.