H.R. 3019: Holding Nonprofit Hospitals Accountable Act

This bill, titled the Holding Nonprofit Hospitals Accountable Act, aims to amend the Internal Revenue Code to establish new standards for nonprofit hospitals in order to maintain their tax-exempt status. Here are the main provisions of the bill:

New Community Benefit Standards

The bill introduces specific community benefit requirements for nonprofit hospitals to qualify for tax exemptions. A hospital organization must:

• Have a board of directors that is representative of the local community.
• Provide care to patients using public programs, such as Medicare and Medicaid, without limiting the number of such patients treated at their facilities.
• Meet or exceed a defined expenditure threshold, which is set at 100% of the value of their federal, state, and local tax exemptions, through investments in:
  • Training, education, or research aimed at improving patient care,
  • Improvements to facilities and equipment (with specific rules on what qualifies), and
  • Free or discounted care following a financial assistance policy.

Expenditure Threshold Clarification

The bill stipulates that for the purpose of meeting the spending requirement, expenditures related to the acquisition of practices or care delivery organizations cannot count towards the improvement of facilities or equipment.

Compliance with Financial Assistance Policies

Additionally, the bill amends the requirement for financial assistance policies to state that the billed amounts to patients must align with Medicare rates.

Oversight and Reporting

The bill mandates several oversight measures, including:

• A review of financial assistance policies by the Treasury Inspector General for Tax Administration, with reports generated annually to monitor compliance and policy effectiveness.
• A review of Internal Revenue Service (IRS) effectiveness in enforcing the community benefit standard, also with reports due at intervals after enactment.

Effective Date

All provisions outlined in this bill will apply starting from taxable years that begin after December 31, 2025.

Relevant Companies

• None found