As the U.S. House of Representatives Committee on Ways and Means considers draft legislation that would expand IRS Form 990 and Schedule H disclosures for nonprofit, tax-exempt hospitals, now is the time for hospitals to provide feedback and comments to Ways and Means Committee staff. It is likely that the draft legislation will continue to go through further revisions by staff, and this is an opportunity for hospitals, associations and other stakeholders to review and express any issues or concerns with the proposed new reporting and disclosures.
What the Draft Legislation Would Require
The draft legislation currently includes new reporting and disclosures on charity care, community benefit and other spending, as well as Centers for Medicare & Medicaid Services identifiers, Section 340B drug pricing program information, priority health needs spending, subsidized service lines, financial assistance applications and other information. The draft also suggests a requirement for hospitals to disclose the amount of federal income tax they would pay if they were not tax-exempt – a potentially difficult exercise and burden for many organizations.
It may be appropriate to consider and request exceptions to this reporting if the disclosures are seen as a regulatory or administrative burden. For example, small hospitals, rural hospitals, governmental dual-status entities, hospital joint ventures and others may face additional burdens. Larger hospitals and systems may have potentially misinterpreted data if they are subject to further reporting at both the facility and aggregate level.
Why Hospitals Should Engage Now
The path forward for this draft legislation is unclear, including how it would move forward in the current U.S. Congress. It's also uncertain whether there is a legislative vehicle to which this new set of hospital reporting and disclosure provisions could be attached. The messaging from the Ways and Means Committee, however, is clear for nonprofit, tax-exempt hospitals from the types of questions and disclosures being asked in the draft legislation and the heightened level of scrutiny of such hospitals. Hospitals should consider an internal review, discuss the potential operational and reputational implications with advisors, and provide comments and suggestions to Ways and Means Committee staff during this drafting period.
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