Section 1 Short title
This Act may be cited as the “Non-Profit Hospital Tax Exemption Transparency Act”.
Non-Profit Hospital Tax Exemption Transparency Act
A BILL
To amend the Internal Revenue Code of 1986 to establish new community benefit standards for tax-exempt hospital organizations, and for other purposes.
Sec. 2 Additional requirements for certain hospitals
in paragraph (1), by striking “and” in subparagraph (C), by striking the period at the end of subparagraph (D) and inserting “, and”, and by adding at the end the following new subparagraph:
“(E) meets the community benefit standard described in paragraph (7).”
by redesignating paragraph (7) as paragraph (8), and
by inserting after paragraph (6) the following new paragraph:
“(7) Community benefit standard
“(A) In general—A hospital organization meets the requirements of this paragraph if such organization—
“(i) has a board of directors drawn from the community in which such organization is located,
“(ii) both—
“(I) treats patients who pay their bills through public programs, including under the Medicare program under title XVIII of the Social Security Act or under the Medicaid program under title XIX of such Act, and
“(II) does not limit the number of such patients served at any clinical site owned or controlled by such organization, and
“(iii) spends an amount which meets or exceeds the expenditure threshold for the taxable year on any combination of—
“(I) training, education, or research designed to improve patient care,
“(II) improvements to facilities and equipment except as provided in subparagraph (C), and
“(III) free or discounted care pursuant to a financial assistance policy.
“(B) Expenditure threshold—For purposes of this paragraph, the term “expenditure threshold” means 100 percent of the value of the Federal, State, and local tax exemptions of the hospital organization for the taxable year.
“(C) Special rules for improvements to facilities and equipment
“(i) In general—For purposes of clause (iii)(II) of subparagraph (A)—
“(I) expenditures under such clause may not be used to account for more than 50 percent of the minimum spending requirement under such subparagraph, and
“(II) expenditures for the acquisition of a physician practice, hospital, ambulatory surgical center, or any other care delivery organization shall not be taken into account as an improvement to facilities or equipment under such clause.
“(ii) Care delivery organization—For purposes of clause (i), the term “care delivery organization” means an organization of people, institutions, and resources whose primary mission is to deliver health care services to meet the health needs of a target population.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2023.
Sec. 3 Hospital organization financial assistance policy compliance requirements
In general— Section 501(r) of the Internal Revenue Code of 1986, as amended by the preceding provision of this Act, is further amended in paragraph (5)(A) by inserting “according to Medicare rates with respect” after “billed”.
Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2023.
Sec. 4 Financial assistance policy review and report
Review— The Treasury Inspector General for Tax Administration shall conduct a review of financial assistance policies of hospital organizations under section 501(r)(4) of the Internal Revenue Code of 1986.
Report— Not later than 365 days after the date of the enactment of this Act and annually thereafter, the Treasury Inspector General for Tax Administration shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the results of the review conducted under subsection (a), including—
the content of financial assistance policies of hospital organizations,
compliance of hospital organizations with the financial assistance policy requirements of section 501(r)(4) of the Internal Revenue Code of 1986, and
such other topics as are determined by the Treasury Inspector General for Tax Administration to be relevant to financial assistance policies.
Sec. 5 Internal Revenue Service enforcement review and report
Review— The Comptroller General of the United States shall conduct a review of the effectiveness of the Internal Revenue Service in enforcing compliance with the community benefit standard for hospital organizations under section 501(r)(7) of the Internal Revenue Code of 1986.
Report— Not later than 365 days after the date of the enactment of this Act and no later than every three years thereafter, the Comptroller General of the United States shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the results of the review conducted under subsection (a).