What They Are Saying: Ways and Means Committee Bringing Transparency to America’s Nonprofit Hospital Sector

WASHINGTON, D.C. – America’s nonprofit hospitals will be more transparent with patients and taxpayers about the actual charity care they provide under legislation recently approved by the Ways and Means Committee. H.R. 9504, the Tax Exempt Hospital Transparency Act, requires hospitals that enjoy generous benefits due to their tax-exempt status to report additional details on the existing IRS Form 990, which details charity care, community health needs assessments, and facility policies. The new reporting requirements – with large tax-exempt hospitals that have more than 100 inpatient beds and/or more than $100 million in net patient revenue being subject to additional scrutiny – include a Centers for Medicare & Medicaid Services (CMS) certification number for each hospital facility within a nonprofit hospital’s network, the value of financial assistance provided, number of completed financial assistance applications received, granted, and denied, spending and actions taken to address the three highest priority health needs identified in the most recent Community Health Needs Assessment, as well as the amount of spending on quality improvement, nonclinical programming, and advertising costs. Additionally, certain nonprofit hospitals will have to provide information on their health service lines and use of the 340B drug discount program.

Nonprofit hospitals make up nearly 60 percent of all community hospitals – many of which are part of large, sprawling hospital systems. Currently those systems do not have to disclose how they are meeting their community benefit standard requirements on a facility-to-facility basis – making it challenging for taxpayers and the communities they serve to know if their hospital is abiding by its obligations under the tax code.

Organizations and entities supporting greater accountability among America’s health care providers and improving access to quality, affordable care are speaking out in support of the Committee’s work to bring greater transparency to the nation’s nonprofit hospital sector.

Council for Affordable Health Coverage (CAHC)

“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 and the charitable care they deliver to patients. This bill is a necessary first step in exposing whether hospitals are using their tax-exempt status to help patients who need care or are instead protecting their revenue. Hospitals that are living up to their mission should welcome the chance to prove it. CAHC urges Congress to pass this legislation and to keep building toward a system where the nonprofit label means what patients think it means.” – CAHC

Biotechnology Innovation Organization (BIO)

“This legislation is an important first step in shedding light on large hospitals systems that are gaming the 340B program. Our organization strongly supports the original intent of the 340B program, but abusive practices by some of the nation’s largest hospitals have forced the program to stray far from what Congress originally intended. Whether it’s charging massive markups on lifesaving medicines or failing to provide meaningful charity care, misuse of the 340B program is driving up health care costs for employers, patients, and taxpayers, while doing little to help vulnerable patients. All of this is being done while these same hospitals enjoy significant federal tax breaks.” – BIO

The ERISA Industry Committee (ERIC)

“Importantly, H.R. 9504 will hold non-profit hospitals accountable by reporting financial and operational data on how these hospitals are – or are not – addressing community health needs. This information will provide much needed oversight, helping employers and patients better understand the factors contributing to ballooning hospital prices, and help address overall concerns about the impact of anticompetitive hospital practices and consolidation on the affordability of health care.” – James P. Gelfand, President & CEO, ERIC

Center for a Free Economy (CFE)

“Past hearings at the Ways and Means Committee have revealed disturbing trends in the tax exempt hospital sector, including but not limited to: excessive executive compensation more befitting Fortune 500 companies; board meetings and retreats held in exotic locations; patients overcharged for routine services without any price transparency; urban hospitals pretending to be rural ones for government benefits; acquisition of community and taxpaying hospitals by these large, tax-exempt hospitals leveraging their tax status; abuse of federal programs; left wing and partisan political activism; and liberal cultural warmongering. This all serves to move tax-exempt hospitals away from their core mission, which is to care for the sick.” – Ryan Ellis, President, CFE

National Association of Manufacturers (NAM)

“Manufacturers are committed to providing health benefits to their workers, but rising healthcare costs remain a top challenge for the industry. Congress must bring transparency to the 340B program, a healthcare cost driver, to help lower costs and protect benefits for manufacturing workers.” – Charles Crain, Managing Vice President of Policy, NAM

National Taxpayers Union (NTU)

“NTU is well aware of the significant compliance burdens tax filers already face and generally supports efforts to streamline reporting requirements. Nevertheless, the extensive participation of nonprofit hospitals in taxpayer-funded health programs requires a balanced approach that includes a stronger emphasis on transparency. Gaining a more thorough understanding of nonprofit hospitals’ financial operations is vital for identifying the pressures driving health care spending.” – NTU

Frontiers of Freedom Institute (FFI)

“We believe that limited government and sound tax policy require accountability for all forms of public subsidy, direct or indirect. H.R. 9504 is a measured, responsible step toward ensuring that tax-exempt hospitals provide the information necessary for Congress, regulators, and the public to evaluate whether the tax-exempt bargain is being honored.” – George C. Landrith III, President, FFI

National Alliance on Mental Illness (NAMI)

“Greater transparency from hospitals is crucial for patients, families, and communities. When hospitals clearly report how they meet local health needs, provide financial assistance, and invest in community benefit, the public can better understand resource allocation.” – NAMI

Large Urology Group Practice Association (LUGPA)

“LUGPA believes improved transparency on how these nonprofit hospitals are using their tax advantages and 340B prescription drug profits will encourage a greater focus on community benefit and help deter increased provider consolidation, which only raises costs and hampers competition and patient choice.” – Scott Sellinger, President, LUGPA

Community Action for Responsible Hospitals (CARH)

“On behalf of Community Action for Responsible Hospitals, representing the interests of workers, faith leaders, healthcare providers, and patient advocates, we write to express our support for H.R. 9504, the Tax-Exempt Hospital Transparency Act.” – CARH

The Partnership for Employer-Sponsored Coverage (P4ESC)

“The Partnership for Employer-Sponsored Coverage (P4ESC) applauds the House Ways and Means Committee for advancing the Tax Exempt Hospital Transparency Act (H.R. 9504) and its continued efforts to improve health care price transparency for Americans.” – P4ESC

Consumer Action for a Strong Economy (CASE)

“The proposal requires non-profit hospitals to report additional information on their Form 990 and imposes additional reporting requirements on large and high revenue tax exempt hospital organizations. CASE applauds Ways and Means for continuing to pay close attention to this important issue and investigate legislative solutions.” – CASE

National Alliance of Healthcare Purchaser Coalitions

“Reporting from the New York Times, Wall Street Journal and other sources have shown how large tax-exempt hospital systems have taken advantage of 340B to pad their profits while driving up costs. That is why the National Alliance is supportive of efforts like HR9504 to bring more transparency to these entities — and in particular, to the 340B Drug Pricing Program, which research shows increases costs for employers.” – National Alliance of Healthcare Purchaser Coalitions

CancerCare

“I am writing on behalf of CancerCare, an 81-year-old not-for-profit organization, to applaud the major step forward that H.R. 9504 will provide for cancer patients. CancerCare empowers millions of people affected by cancer through free counseling, resource navigation, support groups, educational resources, advocacy, and direct financial assistance…” – Kim Czubaruk, Vice President of Policy, CancerCare

60 Plus Association

“Nonprofit hospitals receive significant tax benefits in exchange for serving the public interest, and taxpayers deserve clear information demonstrating that these institutions are fulfilling those obligations. Expanding transparency through additional reporting requirements on Schedule H will improve accountability, strengthen public confidence, and provide policymakers with better information about how charitable resources are being used. Greater transparency ultimately benefits patients, communities, and taxpayers alike, and we commend Representative Greg Murphy for championing this important reform.” – Saulius “Saul” Anuzis, President, 60 Plus Association