Tax Exempt Hospital Transparency Act
- Bill Number
- H.R. 9504
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-07-01: Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 25 - 15.
- Last Updated
- 2026-07-07T17:13:18Z
AI-Generated Summary
Purpose This legislation amends the Internal Revenue Code of 1986 to require tax-exempt hospital organizations to provide additional information on their annual tax returns. The goal is to increase transparency regarding community benefit activities, financial operations, and specific programs.
Key Provisions
- New Reporting Section (6033A): Requires all tax-exempt hospital organizations to report on their Form 990 (under section 6033(a)) details such as:
- How they address needs from their most recent community health needs assessment, including unmet needs and reasons.
- Audited financial statements.
- Centers for Medicare & Medicaid Services certification number.
- Value of financial assistance provided under their financial assistance policy.
- Numbers of financial assistance applications received, granted, and denied.
- Additional Requirements for Large Tax-Exempt Hospital Organizations (those with more than 100 staffed inpatient beds, excluding critical access or rural emergency hospitals):
- Top three priority health needs from the community assessment, spending on programs addressing them, actions taken, and community health impact.
- Spending on quality improvement (e.g., education, training, compliance programs), nonclinical programming (e.g., administration, IT, billing, facilities management), and other community benefits.
- Additional Requirements for High Revenue Tax-Exempt Hospital Organizations (those with net patient revenue over $100 million, adjusted for inflation after 2028, excluding critical access or rural emergency hospitals):
- Advertising costs (allowable and unallowable as reported to CMS).
- Health service line information, including descriptions, gross receipts, and costs per line (with standardized taxonomy to be developed by HHS within two years).
- For organizations participating in the 340B drug discount program: details on individuals served by insurance type, net payment amounts, and program compliance costs.
- Separate Reporting: Large and high-revenue organizations must report much of this information separately for each hospital facility.
- Conforming Amendments: Updates to existing section 6033(b) and the table of sections.
- Effective Dates: Most provisions apply to taxable years beginning after one year from the first standardized taxonomy publication; simpler financial assistance reporting applies after three years for smaller organizations.
- GAO Report: Requires a study within three years on administrative costs and estimated tax liability if the largest 25 organizations lost tax-exempt status.
- No Inference Clause: Clarifies the bill creates no legal presumption about 340B program rules, 501(c)(3) or 501(r) status, or related doctrines.
Significant Changes to Existing Law The bill adds an entirely new section (6033A) to the Internal Revenue Code focused on hospital-specific disclosures, expanding beyond current community benefit reporting under section 501(r). It introduces detailed breakdowns of spending, service lines, and 340B participation not previously required on tax returns. Conforming changes remove one existing reporting paragraph in section 6033(b).
Potential Impacts
- Government Agencies: Increases IRS administration workload and requires coordination with CMS and the Health Resources and Services Administration. The GAO study will assess Treasury and hospital compliance costs.
- Citizens: Provides more public data on hospital community benefits, financial assistance, and operations, potentially aiding oversight of tax-exempt status.
- International Relations: None identified in the legislation.
Main Stakeholders Affected
- Tax-exempt hospital organizations (particularly large and high-revenue ones).
- The Department of the Treasury and IRS.
- HHS agencies (CMS and HRSA).
- Congress (receives the GAO report).
- Communities and patients served by these hospitals.
Notable Legal, Constitutional, or Political Implications The bill strengthens transparency requirements tied to tax-exempt status under section 501(r) without altering core eligibility rules. It includes a clause stating it creates no inference regarding existing 340B or tax-exemption interpretations. No constitutional issues are addressed in the text.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Murphy, Gregory F. [R-NC-3]
Cosponsors (1)
Recent Actions
- 2026-07-01: Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 25 - 15.
- 2026-07-01: Committee Consideration and Mark-up Session Held
- 2026-06-29: Referred to the House Committee on Ways and Means.
- 2026-06-29: Introduced in House
- 2026-06-29: Introduced in House
Bill Versions
- Tax Exempt Hospital Transparency Act — issued 2026-06-29 — PDF (18 pages)