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Statutory Text

SEC. 9007. ADDITIONAL REQUIREMENTS FOR CHARITABLE HOSPITALS.
(a) REQUIREMENTS TO QUALIFY AS SECTION 501(C)(3) CHARITABLE
HOSPITAL ORGANIZATION.—Section 501 of the Internal Revenue
Code of 1986 (relating to exemption from tax on corporations,
certain trusts, etc.) is amended by redesignating subsection (r) as
subsection (s) and by inserting after subsection (q) the following
new subsection:
‘‘(r) ADDITIONAL REQUIREMENTS FOR CERTAIN HOSPITALS.—
‘‘(1) IN GENERAL.—A hospital organization to which this
subsection applies shall not be treated as described in subsection
(c)(3) unless the organization—
‘‘(A) meets the community health needs assessment requirements
described in paragraph (3),
‘‘(B) meets the financial assistance policy requirements
described in paragraph (4),
‘‘(C) meets the requirements on charges described in
paragraph (5), and
‘‘(D) meets the billing and collection requirement described
in paragraph (6).
‘‘(2) HOSPITAL ORGANIZATIONS TO WHICH SUBSECTION APPLIES.—
‘‘(A) IN GENERAL.—This subsection shall apply to—
‘‘(i) an organization which operates a facility
which is required by a State to be licensed, registered,
or similarly recognized as a hospital, and
‘‘(ii) any other organization which the Secretary
determines has the provision of hospital care as its
principal function or purpose constituting the basis for
its exemption under subsection (c)(3) (determined
without regard to this subsection).
‘‘(B) ORGANIZATIONS WITH MORE THAN 1 HOSPITAL FACILITY.—
If a hospital organization operates more than 1
hospital facility—
‘‘(i) the organization shall meet the requirements
of this subsection separately with respect to each such
facility, and
‘‘(ii) the organization shall not be treated as described
in subsection (c)(3) with respect to any such facility
for which such requirements are not separately
met.
‘‘(3) COMMUNITY HEALTH NEEDS ASSESSMENTS.—
‘‘(A) IN GENERAL.—An organization meets the requirements
of this paragraph with respect to any taxable year
only if the organization—
‘‘(i) has conducted a community health needs assessment
which meets the requirements of subparagraph
(B) in such taxable year or in either of the 2
taxable years immediately preceding such taxable
year, and
‘‘(ii) has adopted an implementation strategy to
meet the community health needs identified through
such assessment.
‘‘(B) COMMUNITY HEALTH NEEDS ASSESSMENT.—A community
health needs assessment meets the requirements
of this paragraph if such community health needs assessment—
‘‘(i) takes into account input from persons who
represent the broad interests of the community served
by the hospital facility, including those with special
knowledge of or expertise in public health, and
‘‘(ii) is made widely available to the public.
‘‘(4) FINANCIAL ASSISTANCE POLICY.—An organization
meets the requirements of this paragraph if the organization
establishes the following policies:
‘‘(A) FINANCIAL ASSISTANCE POLICY.—A written financial
assistance policy which includes—
‘‘(i) eligibility criteria for financial assistance, and
whether such assistance includes free or discounted
care,
‘‘(ii) the basis for calculating amounts charged to
patients,
‘‘(iii) the method for applying for financial assistance,
‘‘(iv) in the case of an organization which does not
have a separate billing and collections policy, the actions
the organization may take in the event of nonpayment,
including collections action and reporting to
credit agencies, and
‘‘(v) measures to widely publicize the policy within
the community to be served by the organization.
‘‘(B) POLICY RELATING TO EMERGENCY MEDICAL CARE.—
A written policy requiring the organization to provide,
without discrimination, care for emergency medical conditions
(within the meaning of section 1867 of the Social Security
Act (42 U.S.C. 1395dd)) to individuals regardless of
their eligibility under the financial assistance policy described
in subparagraph (A).
‘‘(5) LIMITATION ON CHARGES.—An organization meets the
requirements of this paragraph if the organization—
‘‘(A) limits amounts charged for emergency or other
medically necessary care provided to individuals eligible
for assistance under the financial assistance policy described
in paragraph (4)(A) to not more than the amounts
generally billed to individuals who have insurance covering
such care, and øAs revised by section 10903(a)¿
‘‘(B) prohibits the use of gross charges.
‘‘(6) BILLING AND COLLECTION REQUIREMENTS.—An organization
meets the requirement of this paragraph only if the organization
does not engage in extraordinary collection actions
before the organization has made reasonable efforts to determine
whether the individual is eligible for assistance under the
financial assistance policy described in paragraph (4)(A).
‘‘(7) REGULATORY AUTHORITY.—The Secretary shall issue
such regulations and guidance as may be necessary to carry
out the provisions of this subsection, including guidance relating
to what constitutes reasonable efforts to determine the eligibility
of a patient under a financial assistance policy for purposes
of paragraph (6).’’.
(b) EXCISE TAX FOR FAILURES TO MEET HOSPITAL EXEMPTION
REQUIREMENTS.—
(1) IN GENERAL.—Subchapter D of chapter 42 of the Internal
Revenue Code of 1986 (relating to failure by certain charitable
organizations to meet certain qualification requirements)
is amended by adding at the end the following new section:
‘‘SEC. 4959. TAXES ON FAILURES BY HOSPITAL ORGANIZATIONS.
‘‘If a hospital organization to which section 501(r) applies fails
to meet the requirement of section 501(r)(3) for any taxable year,
there is imposed on the organization a tax equal to $50,000.’’.
(2) CONFORMING AMENDMENT.—The table of sections for
subchapter D of chapter 42 of such Code is amended by adding
at the end the following new item:
‘‘Sec. 4959. Taxes on failures by hospital organizations.’’.
(c) MANDATORY REVIEW OF TAX EXEMPTION FOR HOSPITALS.—
The Secretary of the Treasury or the Secretary’s delegate shall review
at least once every 3 years the community benefit activities
of each hospital organization to which section 501(r) of the Internal
Revenue Code of 1986 (as added by this section) applies.
(d) ADDITIONAL REPORTING REQUIREMENTS.—
(1) COMMUNITY HEALTH NEEDS ASSESSMENTS AND AUDITED
FINANCIAL STATEMENTS.—Section 6033(b) of the Internal Revenue
Code of 1986 (relating to certain organizations described
in section 501(c)(3)) is amended by striking ‘‘and’’ at the end
of paragraph (14), by redesignating paragraph (15) as paragraph
(16), and by inserting after paragraph (14) the following
new paragraph:
‘‘(15) in the case of an organization to which the requirements
of section 501(r) apply for the taxable year—
‘‘(A) a description of how the organization is addressing
the needs identified in each community health needs
assessment conducted under section 501(r)(3) and a de-
scription of any such needs that are not being addressed
together with the reasons why such needs are not being
addressed, and
‘‘(B) the audited financial statements of such organization
(or, in the case of an organization the financial statements
of which are included in a consolidated financial
statement with other organizations, such consolidated financial
statement).’’.
(2) TAXES.—Section 6033(b)(10) of such Code is amended
by striking ‘‘and’’ at the end of subparagraph (B), by inserting
‘‘and’’ at the end of subparagraph (C), and by adding at the end
the following new subparagraph:
‘‘(D) section 4959 (relating to taxes on failures by hospital
organizations),’’.
(e) REPORTS.—
(1) REPORT ON LEVELS OF CHARITY CARE.—The Secretary of
the Treasury, in consultation with the Secretary of Health and
Human Services, shall submit to the Committees on Ways and
Means, Education and Labor, and Energy and Commerce of
the House of Representatives and to the Committees on Finance
and Health, Education, Labor, and Pensions of the Senate
an annual report on the following:
(A) Information with respect to private tax-exempt,
taxable, and government-owned hospitals regarding—
(i) levels of charity care provided,
(ii) bad debt expenses,
(iii) unreimbursed costs for services provided with
respect to means-tested government programs, and
(iv) unreimbursed costs for services provided with
respect to non-means tested government programs.
(B) Information with respect to private tax-exempt
hospitals regarding costs incurred for community benefit
activities.
(2) REPORT ON TRENDS.—
(A) STUDY.—The Secretary of the Treasury, in consultation
with the Secretary of Health and Human Services,
shall conduct a study on trends in the information required
to be reported under paragraph (1).
(B) REPORT.—Not later than 5 years after the date of
the enactment of this Act, the Secretary of the Treasury,
in consultation with the Secretary of Health and Human
Services, shall submit a report on the study conducted
under subparagraph (A) to the Committees on Ways and
Means, Education and Labor, and Energy and Commerce
of the House of Representatives and to the Committees on
Finance and Health, Education, Labor, and Pensions of the
Senate.
(f) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in paragraphs (2) and
(3), the amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this
Act.
(2) COMMUNITY HEALTH NEEDS ASSESSMENT.—The requirements
of section 501(r)(3) of the Internal Revenue Code of
1986, as added by subsection (a), shall apply to taxable years
beginning after the date which is 2 years after the date of the
enactment of this Act.
(3) EXCISE TAX.—The amendments made by subsection (b)
shall apply to failures occurring after the date of the enactment
of this Act.