Holding Nonprofit Hospitals Accountable Act

This bill tightens the rules for nonprofit hospitals that get tax breaks. Hospitals would need a community-based board, accept Medicare and Medicaid patients, and not cap how many of those patients they serve at any of their clinics. They must also spend at least the full value of their federal, state, and local tax exemptions each year on community benefits like free or discounted care, training/education/research to improve care, or facility and equipment upgrades. Only up to half of that spending can be counted from facility/equipment improvements, and buying physician practices or other care organizations would not count toward that spending goal.

The bill orders regular watchdog reviews. A Treasury inspector would examine hospital financial assistance policies each year and report on what those policies say and whether hospitals follow them. Another review would check how well the IRS enforces the new community benefit standard, with reports due first within a year and then every three years. The new hospital requirements apply to tax years starting after December 31, 2025.

Key points

• Who is affected: Nonprofit hospitals that receive tax exemptions.
• What changes: Must have a local board; treat Medicare/Medicaid patients without limits; and spend at least the value of their tax breaks on community benefits, with caps on counting building/equipment upgrades and no credit for buying medical practices.
• Oversight: Annual reviews of hospital financial assistance policies; periodic reviews of IRS enforcement of the standard.
• When: Applies to hospital tax years beginning after December 31, 2025; first oversight reports due within one year of enactment .