LUGPA Policy Update - H.R. 9504, The Tax-Exempt Hospital Transparency Act

July 2026

At a Glance

What Happened

• LUGPA has formally endorsed H.R. 9504, the Tax-Exempt Hospital Transparency Act, bipartisan legislation designed to increase transparency and accountability for tax-exempt hospitals and their use of 340B Drug Pricing Program revenue.
• The bill requires large nonprofit hospitals to publicly report how they use tax benefits and 340B savings, including community benefit spending, financial assistance, and aggregate 340B profits.

Why It Matters

• Greater transparency will help policymakers and the public evaluate whether tax-exempt hospitals are fulfilling their charitable missions and using federal benefits to improve patient care rather than finance consolidation.
• Independent physician practices continue to face increasing competitive pressure as large hospital systems acquire physician groups using revenues generated through tax advantages and 340B profits.

Key Policy Signals

• Increased oversight of nonprofit hospital tax exemptions.
• New reporting requirements for charity care, community benefit activities, and financial assistance.
• First-time public disclosure of aggregate 340B program profits for large tax-exempt hospitals.
• Greater accountability for hospitals benefiting from significant federal and state tax preferences.

Background

Tax-exempt hospitals receive billions of dollars annually in federal, state, and local tax benefits while also participating in the 340B Drug Pricing Program. Despite these advantages, current law does not establish a minimum charity care requirement. Instead, hospitals broadly report "community benefits," often with limited transparency regarding how resources directly improve patient access or affordability.

Concerns raised by policymakers and oversight organizations include:

• Charity care frequently represents a relatively small share of hospital revenue.
• Some nonprofit hospitals spend less on charity care and community investment than the estimated value of their tax exemptions.
• Aggressive collection practices against financially vulnerable patients continue at some nonprofit hospitals.
• Revenues generated through tax advantages and the 340B program have increasingly supported hospital acquisitions of physician practices and market expansion.

The rapid growth of the 340B program has further intensified these concerns, with policymakers seeking greater transparency regarding how program savings are ultimately used.

What H.R. 9504 Would Do

The Tax-Exempt Hospital Transparency Act would require large tax-exempt hospitals to publicly report:

• Actions taken to address identified community health needs.
• Spending on quality improvement and community benefit initiatives.
• The number of financial assistance applications received, approved, and denied.
• The total value of financial assistance provided.
• Aggregate net profits generated through the 340B Drug Pricing Program.

These reporting requirements are intended to improve public accountability while providing policymakers with better information regarding how nonprofit hospitals utilize public subsidies.

Legislative Update

On July 1, 2026, the House Ways and Means Committee favorably reported H.R. 9504 following a full committee markup, advancing the legislation for possible consideration by the full House. During the markup, committee leaders emphasized concerns that some tax-exempt hospitals have accumulated significant financial resources while providing limited transparency regarding their charitable activities and use of 340B program revenue. The bill was approved on a party-line vote.

Why This Matters to Independent Urology

LUGPA believes increased transparency will help address market distortions that contribute to healthcare consolidation.

Growing hospital acquisition of independent physician practices can:

• Increase healthcare spending.
• Reduce competition and patient choice.
• Threaten the sustainability of independent physician practices.
• Shift resources away from community-based care toward institutional expansion.

Independent physician-owned urology practices continue to provide high-quality, cost-effective care in communities nationwide. Policies that improve transparency and accountability help ensure a more level competitive environment.

LUGPA Position

LUGPA strongly supports H.R. 9504, the Tax-Exempt Hospital Transparency Act.

The legislation promotes greater transparency surrounding tax-exempt hospitals and the 340B Drug Pricing Program while strengthening public accountability for organizations receiving substantial taxpayer-supported benefits. LUGPA believes these reforms will help policymakers better evaluate whether tax-exempt hospitals are fulfilling their charitable missions, discourage anticompetitive consolidation, and support a healthcare system that preserves patient choice, physician independence, and access to high-quality community-based urologic care.

To view LUGPA’s full comment, click here.