TAPP Urges Passage of Tax-Exempt Hospital Transparency Act

The Trade Alliance to Promote Prosperity welcomes congressional consideration of the Tax-Exempt Hospital Transparency Act, a commonsense measure that would bring long-overdue transparency and accountability to the nation's tax-exempt hospital sector, and urges the Act’s swift passage.

Nonprofit hospitals receive substantial public support through their tax-exempt status, amounting to billions of dollars in forgone federal, state, and local tax revenue each year. In return, these institutions are expected to provide meaningful community benefits and charity care that justify these public subsidies.

Unfortunately, the public often has little visibility into whether those expectations are being met.

The Tax-Exempt Hospital Transparency Act would change that by requiring nonprofit hospitals to provide clearer and more detailed reporting on how they use the advantages associated with their tax-exempt status. Hospitals would disclose spending on community benefits, charity care, advertising, quality improvement initiatives, and nonclinical programming. They would also report the amount of taxes they would have paid if they did not receive tax-exempt treatment.

For hospitals participating in the 340B drug pricing program, which is completely out of control, the legislation would require reporting on the number of patients served through the program and the net revenue generated from 340B prescriptions. Accountability in the 340B program is sorely lacking and needs to be front and center.

Transparency should not be controversial. Taxpayers deserve to know how publicly supported institutions are using the significant benefits they receive, and policymakers deserve access to reliable information when evaluating whether these programs are achieving their intended goals.

At a time when healthcare costs continue to rise for patients, employers, unions, and taxpayers alike, greater transparency is an essential first step toward ensuring accountability and reducing waste, fraud, and abuse throughout the health care system.

The Trade Alliance to Promote Prosperity encourages Congress to advance and pass this important legislation expeditiously.