Health Care Providers Responsibility Act of 1988 - Amends the Internal Revenue Code to remove the Federal income tax exemption for interest on any inpatient health care facility bond (a 501(c)(3) bond) with respect to any facility that at the time of bond issuance does not have in effect a provider agreement under the relevant State's Medicaid plan.

Subjects to the tax on unrelated business income of charitable organizations the owner of any inpatient health care facility that was financed from proceeds of any tax-exempt bond and that does not have a provider agreement under a State Medicaid plan. Denies an income tax deduction for interest on financing to these same entities.

Amends title XVIII (Medicare) of the Social Security Act to require hospitals and skilled nursing facilities to have in effect a provider agreement under the relevant State Medicaid program as a condition for eligibility to participate in the Medicare program.