Tax Exempt Hospital Transparency Act

Key Points

• All tax-exempt hospitals must report the value of financial assistance they provide and how many applications they receive, approve, and deny each year. They must also describe how they are responding to community health needs.
• Large hospitals (over 100 staffed beds) face extra requirements to report their top three community health priorities, spending on quality improvement, and spending on nonclinical programs like administration, lobbying, IT, and public affairs.
• High-revenue hospitals earning over $100 million in net patient revenue must break down their finances by individual health service lines, report advertising costs, and disclose details about their participation in the federal 340B drug discount program.
• The bill requires HHS to create a standardized health service line taxonomy within two years of enactment. The new reporting requirements would not take effect until one year after that taxonomy is published, meaning at least a three-year lead time.
• The GAO must study the 25 largest tax-exempt hospital organizations and estimate how much federal income tax they would owe if they were not tax-exempt. This could lay the groundwork for future debates about whether large nonprofit hospitals deserve their tax breaks.