On July 1, the House Ways and Means Committee marked up seven tax-related bills, including the Tax Exempt Hospital Transparency Act (H.R. 9504), which would update the annual Form 990 Schedule H that all tax-exempt hospitals must complete. The bill, sponsored by Reps. Greg Murphy (R-NC) and Loyd Smucker (R-PA), would require tax-exempt hospitals to report additional data, including a description of how the organization is addressing the most recent community health needs assessment, audited financial statements, CMS certification number, the value of financial assistance provided during the taxable year, and the numbers of completed financial assistance applications received, granted, and denied.

The bill also would require both large tax-exempt hospital organizations and high revenue tax-exempt hospital organizations to report additional data. Under the bill, large tax-exempt hospital organizations would be required to report the top three priority health needs in their communities and annual spending on quality improvement, nonclinical programming and other community benefits. High revenue tax-exempt hospitals would be required to provide information related to advertising, costs and gross receipts generated by each service line, and data related to the 340B Drug Pricing Program, including the total number of individuals and their coverage type who received 340B discounted drugs, the net payment amount for those drugs, and the aggregate costs incurred during the taxable year.

The bill defines a large tax-exempt hospital organization as one that has more than 100 staffed inpatient beds. The bill defined a high revenue tax-exempt hospital organization as one that has a net patient revenue of more than $100,000,000 for the taxable year, adjusted annually for inflation. The bill exempts critical access and rural emergency hospitals from both definitions.

The bill, if enacted, would take effect for taxable years beginning one year after the first standardized health service line taxonomy is published for large and high revenue tax-exempt hospital organizations and three years after enactment for all other tax-exempt hospitals. The bill would require the standardized health service line taxonomy to be published within two years of enactment and updated every five years moving forward.

The bill also requires the Government Accountability Office within three years to study the additional cost to the treasury department of implementing the requirements and the cost to hospitals of complying with the requirements, as well as the estimated amount of tax revenue that would be incurred if the 25 tax-exempt hospital organizations with the highest gross revenue lost their tax-exempt status.

More information is available here.

Additional information is available in the WCEY Health Alert, attached below.