Ways and Means Committee Passes Nonprofit Hospital Transparency Bill

The House Ways and Means Committee has approved legislation that would impose significantly stronger disclosure requirements on nonprofit hospitals, shining new light on how the nation’s largest tax-exempt health systems fulfill their obligations to the communities they serve.

What the Legislation Would Do

The measure, H.R. 9504, known as the Tax Exempt Hospital Transparency Act, would expand what nonprofit hospitals are required to report to the IRS on Form 990. Under current law, hospital systems are not required to break down community benefit compliance on a facility-by-facility basis — a gap critics argue leaves the public without a meaningful way to evaluate whether large health systems are meeting the terms of their tax-exempt status.

The new reporting requirements would apply specifically to larger institutions: hospitals with more than 100 inpatient beds or more than $100 million in net patient revenue would face the most rigorous additional scrutiny. Those hospitals would be required to disclose their CMS certification numbers for each facility, the total value of financial assistance they provide, and the number of financial assistance applications received, approved, and denied.

Covered hospitals would also be required to report spending on the top three health priorities identified in their Community Health Needs Assessments — a planning tool hospitals are already required to complete — as well as costs associated with quality improvement programs, nonclinical programming, and advertising. Certain nonprofit hospitals would additionally have to disclose which health service lines they offer and how they participate in the 340B drug discount program.

Why It Matters

Nonprofit hospitals represent nearly 60 percent of all community hospitals in the United States. In exchange for that tax-exempt status, they are expected to provide meaningful community benefit — including charity care for low-income patients. But the current reporting framework has allowed large, multi-facility hospital systems to aggregate their compliance data in ways that make it difficult for patients, policymakers, and researchers to assess how individual hospitals are performing.

The Council for Affordable Health Coverage, a supporter of the legislation, put the problem plainly:

“Nonprofit hospitals receive enormous tax benefits in exchange for serving their communities, but the public still lacks a clear accounting of the community benefits they provide.”

The 340B drug discount program — which allows qualifying hospitals to purchase medications at substantially reduced prices — has drawn separate scrutiny. The Biotechnology Innovation Organization, another supporter of the bill, argued that

“abusive practices by some of the nation’s largest hospitals have forced the program to stray far from what Congress originally intended.”

Requiring hospitals to disclose their 340B participation would add a layer of accountability that the program currently lacks.

Industry and Policy Support

The legislation drew backing from a range of policy and industry groups, including the Council for Affordable Health Coverage, the Biotechnology Innovation Organization, and the ERISA Industry Committee. Their support reflects a broader coalition of interests — from drug manufacturers concerned about 340B misuse to employer groups focused on controlling health benefit costs — who see greater hospital transparency as a prerequisite for meaningful reform.

A Policy Fit for the Moment

The committee’s approval of H.R. 9504 reflects growing bipartisan concern about whether the nation’s largest nonprofit hospitals are truly delivering on their charitable mission. For conservatives, the legislation aligns with principles of accountability, fiscal transparency, and ensuring that government-conferred benefits — in this case, substantial tax exemptions — are matched by genuine public value. For patients navigating an often opaque healthcare system, the expanded reporting could serve as a practical tool for understanding what financial assistance options are actually available to them.

The bill now moves forward in the legislative process, with its supporters making the case that transparency is the essential first step toward a more accountable and patient-centered nonprofit hospital sector.