Non-Profit Hospital Tax Exemption Transparency Act
Bill: H.R.9080 | Sponsor: Rep. Spartz, Victoria (R-IN)
Policy area: Taxation

Summary:
Non-Profit Hospital Tax Exemption Transparency Act
The bill imposes additional community benefit standards for tax-exempt hospital organizations. A hospital organization must have a board of directors drawn from the community in which it is located and must provide medical care for patients who pay their bills through public programs, including Medicare and Medicaid.
The organization may not limit the number of patients served at any clinical site it owns or controls and must spend specified amounts on (1) training, education, or research designed to improve patient care; (2) improvements to facilities and equipment; and (3) free or discounted care.
The Inspector General for Tax Administration of the Department of the Treasury must conduct a review of the financial assistance policies of tax-exempt hospital organizations.
The Government Accountability Office must review and report on the effectiveness of the Internal Revenue Service in enforcing compliance of tax-exempt hospitals with the new community benefit standards.

To amend the Internal Revenue Code of 1986 to establish new community 
benefit standards for tax-exempt 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 ``Non-Profit Hospital Tax Exemption 
Transparency Act''.

SEC. 2. ADDITIONAL REQUIREMENTS FOR CERTAIN HOSPITALS.

    (a) In General.--Section 501(r) of the Internal Revenue Code of 
1986 is amended--
            (1) 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).'',
            (2) by redesignating paragraph (7) as paragraph (8), and
            (3) 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.''.
    (b) 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.

    (a) 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''.
    (b) 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.

    (a) 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.
    (b) 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--
            (1) the content of financial assistance policies of 
        hospital organizations,
            (2) compliance of hospital organizations with the financial 
        assistance policy requirements of section 501(r)(4) of the 
        Internal Revenue Code of 1986, and
            (3) 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.

    (a) 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.
    (b) 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).
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