Tax Insight

Ways and Means Committee advances tax-exempt hospital transparency bill

Insight
5 minute read
July 10, 2026

What happened?

The House Ways and Means Committee on July 1 ordered H.R. 9504, the Tax Exempt Hospital Transparency Act, favorably reported to the House of Representatives. If enacted, the bill would impose additional Form 990 reporting requirements on tax-exempt hospital organizations under a new Section 6033A. The proposed framework would establish baseline reporting requirements for all tax-exempt hospital organizations. Large tax-exempt hospital organizations would be subject to additional facility-level reporting on the three highest priority health needs identified in the organization’s most recent community health needs assessment, and on the amount of spending by the organization on quality improvement, nonclinical programing, and other community benefits. High revenue tax-exempt hospital organizations would be subject to facility-level reporting of specified advertising information, specified health service line information, and in the case of an organization that is a covered entity described in Section 340B of the Public Health Service Act, specified Federal 340B drug discount program information.

Why is it relevant?

The bill represents a significant escalation in congressional focus on whether nonprofit hospitals’ tax-exempt status is justified by transparent, measurable reporting on community benefit and charity care reporting. The proposed bill follows recent congressional scrutiny, including the April Ways and Means hearing on healthcare costs and the March Congressional Research Service (CRS) report examining nonprofit hospital tax benefits and charity care. Refer to PwC Insights regarding earlier developments here, here, and here.

Although the bill would neither impose a minimum charity care requirement nor directly change the Section 501(c)(3) exemption standards, it could materially expand the volume, level of granularity, and facility-level nature of information reported publicly on Form 990, particularly for larger hospitals. The Joint Committee on Taxation has estimated that the proposal would have a negligible revenue effect, underscoring that it is primarily a transparency and reporting measure.

Actions to consider

Tax-exempt healthcare organizations may wish to begin assessing whether their current systems can support the proposed reporting obligations, as applicable, particularly with respect to:

facility-level data and reporting controls;
financial assistance value-at-cost calculations and application tracking;
community health needs assessment spending and impact narratives;
spending on quality improvement, nonclinical programming, and community benefit activities;
health service line gross receipts, costs, and allocation methodologies; and
allowable and unallowable advertising costs reported to CMS and 340B-related information.

Organizations also may want to evaluate whether their current Form 990, Schedule H, audited financial statements, community benefit reporting, and Section 501(r) documentation are consistent, defensible, and aligned with the organization’s broader narrative regarding community impact.