Tax Insight

Congressional hearing reinforces continued scrutiny of nonprofit hospitals and healthcare systems

Insight
5 minute read
May 08, 2026

What happened?

The House Ways and Means Committee held an April 28 hearing on the impact of rising healthcare costs on patients and families. The hearing featured testimony from executives of both nonprofit and for-profit health systems, as well as policy experts. A significant portion of the questioning focused on nonprofit hospital systems.

During the hearing, lawmakers challenged hospital leaders on several key issues, including, in the lawmakers’ view:

the rise in hospital prices despite expanded ACA coverage;
whether tax-exempt status of nonprofit hospitals appropriately reflects their community benefit;
the adequacy and transparency of charity care provided; and
the impact of consolidation strategies and facility fees on escalating costs and patient price transparency.

Why is it relevant?

The hearing highlights the ongoing federal scrutiny of nonprofit hospitals—not only from a tax perspective but also across broader policy, pricing, and operational issues. It follows the March 30, 2026, release of a Congressional Research Service (CRS) report titled “Nonprofit Hospitals, Tax Benefits, and Charity Care,” which questioned whether nonprofit hospitals provide sufficient community benefit relative to the tax advantages they receive (for more details, see our PwC Insight on the CRS report).

Actions to consider

Nonprofit healthcare organizations may want to consider reassessing whether their levels of community benefit and charity care are clearly aligned with the tax advantages they receive and defensible under increased federal scrutiny. Strengthening the organization’s narrative and transparency around pricing structures, financial assistance programs, and overall community impact could provide significant benefits.

Additionally, organizations may want to review their reporting and compliance frameworks—including Form 990 reporting practices, Section 501(r) compliance, and the consistency and defensibility of disclosures. From a strategic perspective, organizations may want to reevaluate pricing and consolidation strategies through the lens of how these actions could be perceived by regulators and policymakers.

Ongoing monitoring of policy developments remains critical, particularly potential changes related to minimum charity care requirements, enhanced IRS oversight, revised community benefit standards, and the tax treatment of nonprofit hospital assets. Simultaneously, organizations may want to proactively mitigate trust and reputational risks by developing a clear, data-supported narrative that demonstrates community value, access improvements, and responsible financial stewardship.