Congressional Oversight

Oversight Subcommittee Examines Tax-Exempt Hospitals

House Ways and Means Oversight Subcommittee Chairman Amo Houghton (R-NY) held a hearing on June 22, 2004, to examine the pricing practices of tax-exempt and other hospitals. House Ways and Means Committee Chairman Bill Thomas (R-CA) said this was the first in a long series of hearings to examine all tax-exempt organizations. Thomas specifically mentioned nonprofit institutions that are in direct competition with for-profits and said hospitals were a good place to start since they represent 41 percent of all expenditures by tax-exempt organizations.

Thomas questioned how nonprofit hospitals differ from for-profit hospitals and whether the charity care provided by nonprofit hospitals is sufficient to warrant their having tax-exempt status. Witnesses agreed that in general, nonprofit hospitals provide more charitable care than for-profit hospitals. However, there was disagreement on whether that service alone merits tax-exempt status.  Several witnesses also pointed out that the community benefit that nonprofit hospitals provide, and for which they are granted tax-exempt status, encompasses more than charity care.  

Last Updated: June 25, 2004