House Republicans are moving to shine a light on what they view as a sprawling tax-exempt hospital system, advancing legislation out of the Ways and Means Committee that would require nonprofit hospitals to provide greater transparency into how they use billions of dollars in taxpayer-supported benefits.
In a 25-15 vote, the Ways and Means Committee advanced H.R. 9504, the Tax-Exempt Hospital Transparency Act; that legislation targets waste, fraud, and abuse within the tax-exempt hospital system, an issue the Washington Reporter has extensively covered. Rep. Jason Smith (R., Mo.) has previously compared some nonprofit hospital systems to “hedge funds with hospital beds.”
Critics argue that loopholes in federal law have allowed massive hospital systems to enjoy billions of dollars in tax benefits while directing money toward priorities that have little to do with providing affordable care to patients. Republicans say the Tax-Exempt Hospital Transparency Act would provide basic accountability by requiring hospitals to disclose more information about how they use those taxpayer-supported benefits.
Rep. Lloyd Smucker (R., Pa.) touted the legislation as a common sense effort to bring greater transparency to an increasingly opaque system. “It simply asks hospitals to show their work,” he said. “It requires more meaningful reporting on charity care, financial assistance, spending to address community health needs…This is transparency that shouldn’t be controversial.”
Rep. Greg Murphy (R., N.C.), a physician and co-chair of the GOP Doctors Caucus, expressed frustration that Democrats on the committee opposed the transparency legislation amid growing scrutiny of nonprofit hospital spending. “I find it troublesome…given the amount of fraud that’s now being found out around the country…that we actually are going to have folks that vote against transparency,” Murphy said. “These are American taxpayer dollars.”
Murphy also blasted nonprofit hospitals that exploit their tax-exempt status to bankroll “everything from lavish executive spending compensation, overseas investments to advertising on sports stadiums and questionable charity care.”
The committee vote comes as outside watchdog groups are escalating pressure on Washington to scrutinize the tax-exempt hospital industry.
Ahead of the hearing, watchdog group Save Our States launched a television advertisement targeting what it called the “runaway tax-exempt hospital system.” The group also released a “Glitz and Glam” report highlighting 14 examples of tax-exempt hospitals that it argues “betray patients” by “paying massive salaries to top executives and pursuing other dubious spending priorities.” The Reporter previously covered that Save Our States hosted an off-the-Hill happy hour for Trump administration and Capitol Hill staff to discuss the report’s findings.
Save Our States Executive Director Trent England also outlined the campaign in a letter to Vice President JD Vance, arguing that the tax-exempt hospital system should become a target of the administration’s broader efforts to root out waste, fraud, and abuse that harms American taxpayers.
The growing scrutiny puts nonprofit hospitals on notice as Republicans increasingly question whether some of the country’s largest hospital systems are providing enough public benefit to justify their lucrative tax exemptions.
For hospitals receiving billions of dollars in taxpayer-supported benefits, Republicans argue the new standard should be simple: show taxpayers where the money is going.
