H.R. 3019

119th CONGRESS 1st Session

To amend the Internal Revenue Code of 1986 to establish new community benefit standards for tax-exempt hospital organizations, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · April 24, 2025 · Sponsor: Mrs. Spartz · Committee: Committee on Ways and Means

H.R. 3019

SEC. 1. Short title

This Act may be cited as the Holding Nonprofit Hospitals Accountable Act.

SEC. 2. Additional requirements for certain hospitals

(a) In general
- of the Internal Revenue Code of 1986 is amended— Section 501(r)
  - in paragraph (1), by striking in subparagraph (C), by striking the period at the end of subparagraph (D) and inserting , and, and by adding at the end the following new subparagraph:
    - meets the community benefit standard described in paragraph (7).
  - by redesignating paragraph (7) as paragraph (8), and
    - (7) Community benefit standard
      - (A) In general
        
        A hospital organization meets the requirements of this paragraph if such organization—
        
        (i) has a board of directors drawn from the community in which such organization is located,
        
        (ii) both—
        
        treats patients who pay their bills through public programs, including under the Medicare program under title XVIII of the Social Security Act or under the Medicaid program under title XIX of such Act, and
        
        does not limit the number of such patients served at any clinical site owned or controlled by such organization, and
        
        (iii) spends an amount which meets or exceeds the expenditure threshold for the taxable year on any combination of—
        
        training, education, or research designed to improve patient care,
        
        improvements to facilities and equipment except as provided in subparagraph (C), and
        
        free or discounted care pursuant to a financial assistance policy.
      - (B) Expenditure threshold
        
        For purposes of this paragraph, the term means 100 percent of the value of the Federal, State, and local tax exemptions of the hospital organization for the taxable year. expenditure threshold
      - (C) Special rules for improvements to facilities and equipment
        
        (i) For purposes of clause (iii)(II) of subparagraph (A)—
        
        expenditures under such clause may not be used to account for more than 50 percent of the minimum spending requirement under such subparagraph, and
        
        expenditures for the acquisition of a physician practice, hospital, ambulatory surgical center, or any other care delivery organization shall not be taken into account as an improvement to facilities or equipment under such clause.
        
        (ii) For purposes of clause (i), the term means an organization of people, institutions, and resources whose primary mission is to deliver health care services to meet the health needs of a target population. care delivery organization
  - by inserting after paragraph (6) the following new paragraph:
(b) Effective date
- The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

SEC. 3. Hospital organization financial assistance policy compliance requirements

(a) In general
- of the Internal Revenue Code of 1986, as amended by the preceding provision of this Act, is further amended in paragraph (5)(A) by inserting after . Section 501(r)
(b) Effective date
- The amendment made by this section shall apply to taxable years beginning after December 31, 2025.

SEC. 4. Financial assistance policy review and report

(a) Review
- The Treasury Inspector General for Tax Administration shall conduct a review of financial assistance policies of hospital organizations under of the Internal Revenue Code of 1986. section 501(r)(4)
(b) Report
- Not later than 365 days after the date of the enactment of this Act and annually thereafter, the Treasury Inspector General for Tax Administration shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the results of the review conducted under subsection (a), including—
  - the content of financial assistance policies of hospital organizations,
  - compliance of hospital organizations with the financial assistance policy requirements of of the Internal Revenue Code of 1986, and section 501(r)(4)
  - such other topics as are determined by the Treasury Inspector General for Tax Administration to be relevant to financial assistance policies.

SEC. 5. Internal Revenue Service enforcement review and report

(a) Review
- The Comptroller General of the United States shall conduct a review of the effectiveness of the Internal Revenue Service in enforcing compliance with the community benefit standard for hospital organizations under of the Internal Revenue Code of 1986. section 501(r)(7)
(b) Report
- Not later than 365 days after the date of the enactment of this Act and no later than every three years thereafter, the Comptroller General of the United States shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the results of the review conducted under subsection (a).