HouseH.R. 9504119th Congress
Tax Exempt Hospital Transparency Act
Full Text
Official text as published. Use Ctrl+F / Cmd+F to search within the document.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9504 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 9504
To amend the Internal Revenue Code of 1986 to establish additional
reporting requirements for hospital organizations, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 29, 2026
Mr. Murphy (for himself and Mr. Smucker) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish additional
reporting requirements for hospital organizations, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Exempt Hospital Transparency
Act''.
SEC. 2. INFORMATION REPORTING BY HOSPITAL ORGANIZATIONS.
(a) In General.--Subpart A of part III of subchapter A of chapter
61 of the Internal Revenue Code of 1986 is amended by inserting after
section 6033 the following new section:
``SEC. 6033A. REPORTING BY TAX EXEMPT HOSPITAL ORGANIZATIONS.
``(a) Reporting by Tax Exempt Hospital Organizations.--
``(1) In general.--Every tax exempt hospital organization
shall include on the return filed under section 6033(a) for the
taxable year--
``(A) a description of how the organization is
addressing the needs identified in the most recent
community health needs assessment conducted under
section 501(r)(3) and a description of any such needs
that are not being addressed together with the reasons
why such needs are not being addressed,
``(B) the audited financial statements of such
organization (or, in the case of an organization the
financial statements of which are included in a
consolidated financial statement with other
organizations, such consolidated financial statement),
``(C) the Centers for Medicare & Medicaid Services
certification number of the organization (or such other
identifying information as the Secretary may require),
``(D) the value, at cost, of the financial
assistance provided during such taxable year pursuant
to the organization's financial assistance policy (as
described in section 501(r)(4)), and
``(E) the numbers of completed financial assistance
applications received, granted, and denied during the
taxable year pursuant to the organization's financial
assistance policy (as described in section 501(r)(4)).
``(2) Separate reporting with respect to each facility.--
Except as otherwise provided by the Secretary, in the case of
any large tax exempt hospital organization or any high revenue
tax exempt hospital organization, the information described in
subparagraphs (A), (C), (D), and (E) of paragraph (1) shall be
provided with respect to the organization and separately stated
with respect to each hospital facility operated by such
organization.
``(b) Additional Reporting by Large Tax Exempt Hospital
Organizations.--
``(1) In general.--Every large tax exempt hospital
organization shall include on the return filed under section
6033(a) for the taxable year--
``(A) the 3 highest priority health needs
identified in the most recent community health needs
assessment conducted under section 501(r)(3), the
amount of spending during the taxable year on programs
designed to address each such need, and a description
of actions taken during the taxable year to meet each
such need and the impact of such actions on community
health, and
``(B) the amount of spending by the organization
during the taxable year on--
``(i) quality improvement,
``(ii) nonclinical programming, and
``(iii) such other community benefits as
the Secretary may prescribe.
``(2) Quality improvement.--For purposes of this
subsection, the term `quality improvement' means any program,
initiative, or department, with the primary purpose of
improving health outcomes for patients of the organization,
which may include--
``(A) education,
``(B) training,
``(C) compliance with quality improvement programs
(such as quality improvement programs under the
Medicare program under title XVIII of the Social
Security Act), and
``(D) technical assistance.
``(3) Nonclinical programming.--For purposes of this
subsection, the term `nonclinical programming' means any
program, initiative, or department, with a purpose other than
the purpose of improving health outcomes for patients of the
organization and which is related to--
``(A) administrative support and management,
``(B) information technology, hospital
administration, human resources, medical billing and
coding, public affairs and communications, government
affairs and lobbying, regulatory compliance, or
financial planning and budgeting,
``(C) operations and facilities management,
``(D) programming related to patient experience,
patient education, family support, or financial
counseling, or
``(E) discharge planning and appointment
scheduling.
``(4) Separate reporting with respect to each facility.--
Except as otherwise provided by the Secretary, the information
described in paragraph (1) shall be provided with respect to
the organization and separately stated with respect to each
hospital facility operated by such organization.
``(c) Additional Reporting by High Revenue Tax Exempt Hospital
Organizations.--
``(1) In general.--Every high revenue tax exempt hospital
organization shall include on the return filed under section
6033(a) for the taxable year--
``(A) the specified advertising information,
``(B) the specified health service line
information, and
``(C) in the case of an organization which is a
covered entity described in section 340B(a)(4) of the
Public Health Service Act, the specified Federal 340B
drug discount program information.
``(2) Specified advertising information.--For purposes of
this subsection, the term `specified advertising information'
means--
``(A) the allowable advertising costs as reported
to the Centers for Medicare & Medicaid Services for
purposes of cost reimbursement, and
``(B) the unallowable advertising costs (as so
reported).
``(3) Specified health service line information.--
``(A) In general.--For purposes of this subsection,
the term `specified health service line information'
means--
``(i) a description of each health service
line of the organization,
``(ii) the amount of gross receipts
generated by each such health service line, and
``(iii) the costs of each such health
service line (and in the case of costs that are
shared by 1 or more health service lines, an
explanation of how such costs are allocated).
``(B) Health service line.--
``(i) In general.--For purposes of this
paragraph, the term `health service line' means
a discrete clinical program, department, or
care category operated by the organization
that--
``(I) serves a defined patient
population grouped by disease category,
organ system, care setting, or clinical
specialty,
``(II) delivers a distinct set of
medical or health services through
dedicated or allocated staff,
facilities, or equipment, and
``(III) is separately tracked or
identifiable in the organization's
internal cost accounting, service line
management, or operational reporting
systems.
For purposes of this paragraph, any cost center
separately identified on the organization's
most recently filed cost report under section
1815 of the Social Security Act shall be
presumptively treated as a health service line.
If the organization asserts that such a cost
center does not constitute a health service
line, the organization shall bear the burden of
demonstrating that such cost center does not
satisfy the requirements of subclauses (I) and
(II).
``(ii) Standardized health service line
taxonomy.--For purposes of this paragraph--
``(I) In general.--Not later than
the date that is 2 years after the date
of the enactment of this section, the
Secretary of Health and Human Services,
in consultation with the Secretary,
shall publish and maintain a
standardized health service line
taxonomy to which high revenue tax
exempt hospital organizations shall map
their internally defined health service
lines on their returns under section
6033.
``(II) Updates.--The Secretary of
Health and Human Services, in
consultation with the Secretary, shall
update the taxonomy described in
subclause (I) no less frequently than
every 5 years to reflect changes in
clinical care delivery, hospital
organization, and cost accounting
practices.
``(III) Compliance obligation.--A
high revenue tax exempt hospital
organization's compliance with the
reporting requirements of this
subsection with respect to a health
service line enumerated in the taxonomy
published, maintained, and updated
under this clause shall not be
conditioned on whether the organization
separately tracks such service line
under clause (i)(III). A high revenue
tax exempt hospital organization that
does not separately track such an
enumerated health service line shall
disclose that fact and provide an
explanation on their return under
section 6033. The Secretary of Health
and Human Services, in consultation
with the Secretary, may, by regulation,
designate categories of clinical
activity that shall be treated as a
single health service line for
reporting purposes notwithstanding any
difference in how a high revenue tax
exempt hospital organization tracks
such activity in its internal systems.
``(4) Specified federal 340b drug discount program
information.--
``(A) In general.--For purposes of this subsection,
the term `specified Federal 340B drug discount program
information' means--
``(i) the total number of individuals, by
their type of insurance coverage, who were
dispensed or administered covered outpatient
drugs during the taxable year that were subject
to an agreement under section 340B of the
Public Health Service Act,
``(ii) the aggregate net 340B payment
amount with respect to such drugs subject to
such an agreement dispensed or administered by
the organization during such taxable year, and
``(iii) the aggregate costs incurred by the
organization during such taxable year that were
necessary for such organization to participate
in the program under such section and to comply
with such program's requirements (including
program-related compliance, legal, educational,
and administrative costs, and compensation paid
to independent contractors to carry out
program-related functions).
``(B) Covered outpatient drug.--For purposes of
this paragraph, the term `covered outpatient drug' has
the meaning given such term in section 340B(b) of the
Public Health Service Act.
``(C) Aggregate net 340b payment amount.--For
purposes of this paragraph, the term `aggregate net
340B payment amount' means, with respect to a covered
outpatient drug purchased by an organization under an
agreement under section 340B of the Public Health
Service Act and dispensed or administered to an
individual by such organization, the excess (if any)
of--
``(i) the total amount of payments received
from any payor by the organization for such
drug, over
``(ii) the ceiling price (as described in
subsection (a)(1) of such section) for such
drug (or, if less, the price at which such
organization acquired such drug).
``(5) Separate reporting with respect to each facility.--
Except as otherwise provided by the Secretary, the information
described in paragraph (1) shall be provided with respect to
the organization and separately stated with respect to each
hospital facility operated by such organization.
``(6) Agency coordination.--The Secretary shall coordinate
with--
``(A) the Administrator of the Centers for Medicare
& Medicaid Services to carry out the purposes of
paragraphs (2) and (3), and
``(B) the Administrator of the Health Resources and
Services Administration to carry out the purposes of
paragraph (4).
``(d) Definitions.--For purposes of this section--
``(1) Tax exempt hospital organization.--The term `tax
exempt hospital organization' means, with respect to any
taxable year, any organization--
``(A) to which the requirements of section 501(r)
apply for such taxable year, and
``(B) which is required to file a return under
section 6033(a) for such taxable year.
``(2) Large tax exempt hospital organization.--The term
`large tax exempt hospital organization' means, with respect to
any taxable year, any organization which--
``(A) is a tax exempt hospital organization for
such taxable year,
``(B) is not a critical access hospital (as defined
in section 1861(mm)(1) of the Social Security Act) for
such taxable year,
``(C) is not a rural emergency hospital (as defined
in section 1861(kkk)(2) of the Social Security Act) for
such taxable year, and
``(D) has more than 100 staffed inpatient beds (as
reported in any cost report under section 1815 of the
Social Security Act with respect to any portion of such
taxable year or any portion of any of the 3 preceding
taxable years).
``(3) High revenue tax exempt hospital organization.--
``(A) In general.--The term `high revenue tax
exempt hospital organization' means, with respect to
any taxable year, any organization which--
``(i) is a tax exempt hospital organization
for such taxable year,
``(ii) is not a critical access hospital
(as defined in section 1861(mm)(1) of the
Social Security Act) for such taxable year,
``(iii) is not a rural emergency hospital
(as defined in section 1861(kkk)(2) of the
Social Security Act) for such taxable year, and
``(iv) has net patient revenue (determined
in such manner as the Secretary may provide)
for such taxable year of more than
$100,000,000.
``(B) Inflation adjustment.--
``(i) In general.--In the case of any
taxable year beginning in a calendar year after
2028, the $100,000,000 amount in subparagraph
(A)(iv) shall be increased by an amount equal
to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `calendar year 2027' for
`calendar year 2016' in subparagraph
(A)(ii) thereof.
``(ii) Rounding.--Any increase determined
under clause (i) shall be rounded to the
nearest multiple of $100,000.
``(e) Treatment as Part of Annual Return.--For purposes of this
title, the information required to furnished under this section shall
be treated as information required to be furnished under section 6033.
``(f) Regulations.--The Secretary may issue such regulations or
other guidance as may be necessary or appropriate to carry out the
purposes of this section, including regulations or other guidance
providing a methodology for allocating costs between the categories
described in subsections (a)(1)(A), (a)(1)(D), (b)(1)(A), (b)(1)(B)(i),
(b)(1)(B)(ii), and (b)(1)(B)(iii).''.
(b) Conforming Amendments.--
(1) Section 6033(b) of such Code is amended--
(A) by adding ``and'' at the end of paragraph (14),
(B) by striking paragraph (15), and
(C) by redesignating paragraph (16) as paragraph
(15).
(2) The table of sections for subpart A of part III of
subchapter A of chapter 61 of such Code is amended by inserting
after the item relating to section 6033 the following new item:
``Sec. 6033A. Reporting by tax exempt hospital organizations.''.
(c) Effective Date.--
(1) In general.--The amendments made by this subsection
shall apply to taxable years beginning after the date that is 1
year after the date of the publication of the first
standardized health service line taxonomy under section
6033A(c)(3)(B)(ii)(I) of the Internal Revenue Code of 1986 (as
added by this section).
(2) Exception.--In the case of any tax exempt hospital
organization which is neither a large tax exempt hospital
organization nor a high revenue tax exempt hospital
organization, subparagraphs (D) and (E) of section 6033A(a)(1)
of the Internal Revenue Code of 1986 (as added by this section)
shall (notwithstanding paragraph (1)) apply to taxable years
beginning after the date that is 3 years after the date of the
enactment of this Act. Terms used in this paragraph which are
also used in section 6033A of such Code (as so added) shall
have the same meaning as when used in such section.
(d) No Inference.--Nothing in this Act or the amendments made by
this Act shall be construed to create any inference with respect to the
proper application of section 340B of the Public Health Service Act, of
section 501(c)(3) or 501(r) of the Internal Revenue Code of 1986, or of
any operational test or the private benefit doctrine.
SEC. 3. GAO REPORT.
During the 1-year period beginning 3 years after the date of the
enactment of this Act, the Comptroller General of the United States
shall initiate a study and subsequently report to the Committee on Ways
and Means of the House of Representatives and the Committee on Finance
of the Senate on the following:
(1) An estimate of the additional labor and resource costs
of the Department of the Treasury to administer, and of the
additional costs of tax exempt hospital organizations (as
defined in section 6033A(d)(1) of the Internal Revenue Code of
1986, as added by this Act) to comply with, the reporting
requirements added by the amendments made by this Act.
(2) With respect to the 25 tax exempt hospital
organizations (as so defined) which have the highest amount of
gross revenue, the estimated amount of tax which would be
imposed under chapter 1 of such Code with respect to each such
organization if such organization were not exempt from such
tax.
<all>