,i #aaith ,,congress #b;d ,session ,h4 ,r4 #iejd ,,in ,,the ,,house ,,of ,,representatives ,june #bi1 #bjbf,mr4 ,murphy 7for himself and ,mr4 ,smucker7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to establish additional reporting requirements for hospital organizations1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,tax ,exempt ,hospital ,transparency ,act4 #b4 ,information reporting by hospital organizations 7a7 ,in general ,subpart ,a of part ,,iii of subchapter ,a of chapter #fa of the ,internal ,revenue ,code of #aihf is amended by inserting after section #fjcc the following new section3 #fjcc;,a4 ,reporting by tax exempt hospital organizations 7a7 ,reporting by tax exempt hospital organizations 7#a7 ,in general ,every tax exempt hospital organization shall include on the return filed under section #fjcc7;a7 for the taxable year-- 7,a7 a description of how the organization is addressing the needs identified in the most recent community health needs assessment conducted under section #eja7r77#c7 and a description of any such needs that are not being addressed together with the reasons why such needs are not being addressed1 7,b7 the audited financial statements of such organization 7or1 in the case of an organization the financial statements of which are included in a consolidated financial statement with other organizations1 such consolidated financial statement71 7,c7 the ,centers for ,medicare ,medicaid ,services certification number of the organization 7or such other identifying information as the ,secretary may require71 7,d7 the value1 at cost1 of the financial assistance provided during such taxable year pursuant to the organization's financial assistance policy 7as described in section #eja7r77#d771 and 7,e7 the numbers of completed financial assistance applications received1 granted1 and denied during the taxable year pursuant to the organization's financial assistance policy 7as described in section #eja7r77#d774 7#b7 ,separate reporting with respect to each facility ,except as otherwise provided by the ,secretary1 in the case of any large tax exempt hospital organization or any high revenue tax exempt hospital organization1 the information described in subparagraphs 7,a71 7,c71 7,d71 and 7,e7 of paragraph 7#a7 shall be provided with respect to the organization and separately stated with respect to each hospital facility operated by such organization4 7b7 ,additional reporting by large tax exempt hospital organizations 7#a7 ,in general ,every large tax exempt hospital organization shall include on the return filed under section #fjcc7;a7 for the taxable year-- 7,a7 the #c highest priority health needs identified in the most recent community health needs assessment conducted under section #eja7r77#c71 the amount of spending during the taxable year on programs designed to address each such need1 and a description of actions taken during the taxable year to meet each such need and the impact of such actions on community health1 and 7,b7 the amount of spending by the organization during the taxable year on-- 7i7 quality improvement1 7ii7 nonclinical programming1 and 7iii7 such other community benefits as the ,secretary may prescribe4 7#b7 ,quality improvement ,for purposes of this subsection1 the term quality improvement means any program1 initiative1 or department1 with the primary purpose of improving health outcomes for patients of the organization1 which may include-- 7,a7 education1 7,b7 training1 7,c7 compliance with quality improvement programs 7such as quality improvement programs under the ,medicare program under title ,,xviii of the ,social ,security ,act71 and 7,d7 technical assistance4 7#c7 ,nonclinical programming ,for purposes of this subsection1 the term nonclinical programming means any program1 initiative1 or department1 with a purpose other than the purpose of improving health outcomes for patients of the organization and which is related to-- 7,a7 administrative support and management1 7,b7 information technology1 hospital administration1 human resources1 medical billing and coding1 public affairs and communications1 government affairs and lobbying1 regulatory compliance1 or financial planning and budgeting1 7,c7 operations and facilities management1 7,d7 programming related to patient experience1 patient education1 family support1 or financial counseling1 or 7,e7 discharge planning and appointment scheduling4 7#d7 ,separate reporting with respect to each facility ,except as otherwise provided by the ,secretary1 the information described in paragraph 7#a7 shall be provided with respect to the organization and separately stated with respect to each hospital facility operated by such organization4 7c7 ,additional reporting by high revenue tax exempt hospital organizations 7#a7 ,in general ,every high revenue tax exempt hospital organization shall include on the return filed under section #fjcc7;a7 for the taxable year-- 7,a7 the specified advertising information1 7,b7 the specified health service line information1 and 7,c7 in the case of an organization which is a covered entity described in section #cdj;,b7a77#d7 of the ,public ,health ,service ,act1 the specified ,federal #cdj;,b drug discount program information4 7#b7 ,specified advertising information ,for purposes of this subsection1 the term specified advertising information means-- 7,a7 the allowable advertising costs as reported to the ,centers for ,medicare ,medicaid ,services for purposes of cost reimbursement1 and 7,b7 the unallowable advertising costs 7as so reported74 7#c7 ,specified health service line information 7,a7 ,in general ,for purposes of this subsection1 the term specified health service line information means-- 7i7 a description of each health service line of the organization1 7ii7 the amount of gross receipts generated by each such health service line1 and 7iii7 the costs of each such health service line 7and in the case of costs that are shared by #a or more health service lines1 an explanation of how such costs are allocated74 7,b7 ,health service line 7i7 ,in general ,for purposes of this paragraph1 the term health service line means a discrete clinical program1 department1 or care category operated by the organization that-- 7,i7 serves a defined patient population grouped by disease category1 organ system1 care setting1 or clinical specialty1 7,,ii7 delivers a distinct set of medical or health services through dedicated or allocated staff1 facilities1 or equipment1 and 7,,iii7 is separately tracked or identifiable in the organization's internal cost accounting1 service line management1 or operational reporting systems4 ,for purposes of this paragraph1 any cost center separately identified on the organization's most recently filed cost report under section #ahae of the ,social ,security ,act shall be presumptively treated as a health service line4 ,if the organization asserts that such a cost center does not constitute a health service line1 the organization shall bear the burden of demonstrating that such cost center does not satisfy the requirements of subclauses 7,i7 and 7,,ii74 7ii7 ,standardized health service line taxonomy ,for purposes of this paragraph-- 7,i7 ,in general ,not later than the date that is #b years after the date of the enactment of this section1 the ,secretary of ,health and ,human ,services1 in consultation with the ,secretary1 shall publish and maintain a standardized health service line taxonomy to which high revenue tax exempt hospital organizations shall map their internally defined health service lines on their returns under section #fjcc4 7,,ii7 ,updates ,the ,secretary of ,health and ,human ,services1 in consultation with the ,secretary1 shall update the taxonomy described in subclause 7,i7 no less frequently than every #e years to reflect changes in clinical care delivery1 hospital organization1 and cost accounting practices4 7,,iii7 ,compliance obligation ,a high revenue tax exempt hospital organization's compliance with the reporting requirements of this subsection with respect to a health service line enumerated in the taxonomy published1 maintained1 and updated under this clause shall not be conditioned on whether the organization separately tracks such service line under clause 7i77,,iii74 ,a high revenue tax exempt hospital organization that does not separately track such an enumerated health service line shall disclose that fact and provide an explanation on their return under section #fjcc4 ,the ,secretary of ,health and ,human ,services1 in consultation with the ,secretary1 may1 by regulation1 designate categories of clinical activity that shall be treated as a single health service line for reporting purposes notwithstanding any difference in how a high revenue tax exempt hospital organization tracks such activity in its internal systems4 7#d7 ,specified ,federal #cdj;,b drug discount program information 7,a7 ,in general ,for purposes of this subsection1 the term specified ,federal #cdj;,b drug discount program information means-- 7i7 the total number of individuals1 by their type of insurance coverage1 who were dispensed or administered covered outpatient drugs during the taxable year that were subject to an agreement under section #cdj;,b of the ,public ,health ,service ,act1 7ii7 the aggregate net #cdj;,b payment amount with respect to such drugs subject to such an agreement dispensed or administered by the organization during such taxable year1 and 7iii7 the aggregate costs incurred by the organization during such taxable year that were necessary for such organization to participate in the program under such section and to comply with such program's requirements 7including program-related compliance1 legal1 educational1 and administrative costs1 and compensation paid to independent contractors to carry out program-related functions74 7,b7 ,covered outpatient drug ,for purposes of this paragraph1 the term covered outpatient drug has the meaning given such term in section #cdj;,b7b7 of the ,public ,health ,service ,act4 7,c7 ,aggregate net #cdj;,b payment amount ,for purposes of this paragraph1 the term aggregate net #cdj;,b payment amount means1 with respect to a covered outpatient drug purchased by an organization under an agreement under section #cdj;,b of the ,public ,health ,service ,act and dispensed or administered to an individual by such organization1 the excess 7if any7 of-- 7i7 the total amount of payments received from any payor by the organization for such drug1 over 7ii7 the ceiling price 7as described in subsection 7a77#a7 of such section7 for such drug 7or1 if less1 the price at which such organization acquired such drug74 7#e7 ,separate reporting with respect to each facility ,except as otherwise provided by the ,secretary1 the information described in paragraph 7#a7 shall be provided with respect to the organization and separately stated with respect to each hospital facility operated by such organization4 7#f7 ,agency coordination ,the ,secretary shall coordinate with-- 7,a7 the ,administrator of the ,centers for ,medicare ,medicaid ,services to carry out the purposes of paragraphs 7#b7 and 7#c71 and 7,b7 the ,administrator of the ,health ,resources and ,services ,administration to carry out the purposes of paragraph 7#d74 7d7 ,definitions ,for purposes of this section-- 7#a7 ,tax exempt hospital organization ,the term tax exempt hospital organization means1 with respect to any taxable year1 any organization-- 7,a7 to which the requirements of section #eja7r7 apply for such taxable year1 and 7,b7 which is required to file a return under section #fjcc7;a7 for such taxable year4 7#b7 ,large tax exempt hospital organization ,the term large tax exempt hospital organization means1 with respect to any taxable year1 any organization which-- 7,a7 is a tax exempt hospital organization for such taxable year1 7,b7 is not a critical access hospital 7as defined in section #ahfa7mm77#a7 of the ,social ,security ,act7 for such taxable year1 7,c7 is not a rural emergency hospital 7as defined in section #ahfa7kkk77#b7 of the ,social ,security ,act7 for such taxable year1 and 7,d7 has more than #ajj staffed inpatient beds 7as reported in any cost report under section #ahae of the ,social ,security ,act with respect to any portion of such taxable year or any portion of any of the #c preceding taxable years74 7#c7 ,high revenue tax exempt hospital organization 7,a7 ,in general ,the term high revenue tax exempt hospital organization means1 with respect to any taxable year1 any organization which-- 7i7 is a tax exempt hospital organization for such taxable year1 7ii7 is not a critical access hospital 7as defined in section #ahfa7mm77#a7 of the ,social ,security ,act7 for such taxable year1 7iii7 is not a rural emergency hospital 7as defined in section #ahfa7kkk77#b7 of the ,social ,security ,act7 for such taxable year1 and 7iv7 has net patient revenue 7determined in such manner as the ,secretary may provide7 for such taxable year of more than #ajj1jjj1jjj4 7,b7 ,inflation adjustment 7i7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjbh1 the #ajj1jjj1jjj amount in subparagraph 7,a77iv7 shall be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjbg for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7ii7 ,rounding ,any increase determined under clause 7i7 shall be rounded to the nearest multiple of #ajj1jjj4 7e7 ,treatment as part of annual return ,for purposes of this title1 the information required to furnished under this section shall be treated as information required to be furnished under section #fjcc4 7f7 ,regulations ,the ,secretary may issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section1 including regulations or other guidance providing a methodology for allocating costs between the categories described in subsections 7a77#a77;,a71 7a77#a77;,d71 7b77#a77;,a71 7b77#a77;,b77i71 7b77#a77;,b77ii71 and 7b77#a77;,b77iii74 4 7b7 ,conforming amendments 7#a7 ,section #fjcc7;b7 of such ,code is amended-- 7,a7 by adding and at the end of paragraph 7#ad71 7,b7 by striking paragraph 7#ae71 and 7,c7 by redesignating paragraph 7#af7 as paragraph 7#ae74 7#b7 ,the table of sections for subpart ,a of part ,,iii of subchapter ,a of chapter #fa of such ,code is amended by inserting after the item relating to section #fjcc the following new item3 ,sec4 #fjcc;,a4 ,reporting by tax exempt hospital organizations4 4 7c7 ,effective date 7#a7 ,in general ,the amendments made by this subsection shall apply to taxable years beginning after the date that is #a year after the date of the publication of the first standardized health service line taxonomy under section #fjcc;,a7c77#c77;,b77ii77,i7 of the ,internal ,revenue ,code of #aihf 7as added by this section74 7#b7 ,exception ,in the case of any tax exempt hospital organization which is neither a large tax exempt hospital organization nor a high revenue tax exempt hospital organization1 subparagraphs 7,d7 and 7,e7 of section #fjcc;,a7a77#a7 of the ,internal ,revenue ,code of #aihf 7as added by this section7 shall 7notwithstanding paragraph 7#a77 apply to taxable years beginning after the date that is #c years after the date of the enactment of this ,act4 ,terms used in this paragraph which are also used in section #fjcc;,a of such ,code 7as so added7 shall have the same meaning as when used in such section4 7d7 ,no inference ,nothing in this ,act or the amendments made by this ,act shall be construed to create any inference with respect to the proper application of section #cdj;,b of the ,public ,health ,service ,act1 of section #eja7;c77#c7 or #eja7r7 of the ,internal ,revenue ,code of #aihf1 or of any operational test or the private benefit doctrine4 #c4 ,,gao report ,during the #a-year period beginning #c years after the date of the enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall initiate a study and subsequently report to the ,committee on ,ways and ,means of the ,house of ,representatives and the ,committee on ,finance of the ,senate on the following3 7#a7 ,an estimate of the additional labor and resource costs of the ,department of the ,treasury to administer1 and of the additional costs of tax exempt hospital organizations 7as defined in section #fjcc;,a7d77#a7 of the ,internal ,revenue ,code of #aihf1 as added by this ,act7 to comply with1 the reporting requirements added by the amendments made by this ,act4 7#b7 ,with respect to the #be tax exempt hospital organizations 7as so defined7 which have the highest amount of gross revenue1 the estimated amount of tax which would be imposed under chapter #a of such ,code with respect to each such organization if such organization were not exempt from such tax4