HELENA — A bill that would have lifted the tax-exempt status of nonprofit hospitals in Montana was killed Thursday in the House Taxation Committee, with most members raising concerns about unintended consequences that could result at a time when hospitals are faced with federal changes in health-care funding.

House Bill 305 was rejected by a 15-4 margin, but the committee was in consensus that there will be a study on the question of what degree nonprofit hospitals should be tax-exempt.

The bill’s sponsor, Rep. Keith Regier, R-Kalispell, said the bill was not anti-hospital but was a pro-competition measure aimed at leveling the playing field between nonprofit hospitals and the private health-care sector.

Regier maintains that physicians in private practice pay property taxes and business equipment taxes but receive less in health care reimbursements.

He also said the bill would have benefited residential property taxpayers who shoulder an additional burden when nonprofit hospitals buy private practices or expand into other businesses, such as physical fitness facilities and pharmacies.

Representatives of Northwest Healthcare say that some proponents of the bill created a misperception that nonprofits are totally tax-exempt. Northwest Healthcare, the parent company of Kalispell Regional Medical Center, pays more than $1 million in annual property taxes and it is taxed in areas such as pharmacies, therapy and medical supply.

They also note that with nearly 2,500 employees, Northwest Healthcare is Flathead County’s largest employer, and lifting the tax-exempt status would cost about $2 million annually.

 “But they don’t pay 100 percent like businesses and homeowners,” said Regier, who is pleased that his bill brought attention to the issue.

Committee Chairman Mark Blasdel, R-Somers, voted for the bill but acknowledged the concerns of his colleagues.

“A lot of members on my side of the aisle come from rural areas” where many critical access hospitals would lose their tax-exempt status, he said.

The committee anticipates legislation that would bring about a study of the issue.

“We welcome a study,” said Charlie Pearce, chief financial officer at Kalispell Regional Medical Center.

“It’s a really complex issue,” added Dr. Craig Eddy, the hospital’s chief medical officer. “And I think the idea of slowing down and taking a look at this … was a really prudent move by the Legislature.”

That’s especially so at a time when health-care providers are contending with sweeping federal health-care legislation.

“I think it’s really important for hospitals and communities to figure out, with this federal legislation, how we’re going to deliver health care in our rural areas,” Eddy added.