By Kim Scifres, CPA, Principal

Tax-exempt hospitals continue to face increasing scrutiny from lawmakers, regulators, researchers, and the public regarding how they demonstrate the value they provide to their communities. Recent federal legislative activity and growing public transparency initiatives suggest that expectations around community benefit reporting are likely to increase—not only in the amount of information reported, but also in the level of detail and accountability expected.

For nonprofit hospitals, now is an ideal time to evaluate current community benefit reporting processes, strengthen documentation, and ensure community investments are being fully identified and accurately reported.

Congress Proposes Expanded Community Benefit Reporting

On July 1, 2026, the House Committee on Ways and Means approved H.R. 9504, the Tax Exempt Hospital Transparency Act. While the legislation has not yet been enacted, it represents one of the most significant proposed expansions of federal reporting requirements for tax-exempt hospitals in recent years.

The proposal would require additional information to be reported annually on IRS Form 990 by organizations subject to Internal Revenue Code Section 501(r).

Among the proposed new reporting requirements are:

• CMS Certification Number
• Financial assistance provided during the year reported at cost
• Number of financial assistance applications received, approved, and denied
• Enhanced reporting regarding Community Health Needs Assessment (CHNA) priorities and implementation activities

For larger hospital organizations (generally more than 100 staffed beds) and higher revenue organizations (generally more than $100 million in net patient revenue), the proposal would require substantially more detailed reporting, including:

• Community benefit information by individual hospital facility
• Spending on the organization’s three highest CHNA priorities
• Measurable actions and impacts associated with those investments
• Reporting on quality improvement activities
• Reporting on nonclinical programming
• Detailed health service line financial information
• Certain advertising cost disclosures
• Additional reporting related to participation in the federal 340B Drug Pricing Program

Although the legislation still must pass both chambers of Congress before becoming law, it serves as a strong indication of the current policy trajectory. Hospitals that proactively improve data collection and reporting processes today will be better positioned should these requirements ultimately become effective.

For additional information, see the Joint Committee on Taxation’s Description of H.R. 9504:
https://www.jct.gov/publications/2026/jcx-26-26/

Community Benefit Reporting is Receiving Broader Public Attention

Legislative proposals are only one part of the growing focus on nonprofit hospital accountability.

In June 2026, the Lown Institute released its annual rankings evaluating more than 3,600 hospitals across the country. Community benefit remains one of the components incorporated into the organization’s Social Responsibility rankings.

Regardless of differing opinions regarding the methodologies used by outside organizations, rankings such as these frequently receive significant national and local media attention and contribute to public perceptions regarding whether nonprofit hospitals are providing sufficient value in exchange for their tax-exempt status.

As transparency initiatives continue to expand, hospitals should expect increased attention from:

• Congress and federal agencies
• State attorneys general
• State charity regulators
• Journalists and public policy organizations
• Community stakeholders
• Hospital boards and executive leadership

Strong community benefit reporting is increasingly becoming both a compliance exercise and an important component of demonstrating organizational mission and community impact.

Now Is The Time to Strengthen Your Community Benefit Strategy

Many organizations have mature community benefit reporting processes. However, our experience shows there are often opportunities to strengthen reporting by identifying qualifying activities that are already occurring but are not being consistently documented or reported.

Organizations may benefit from evaluating:

• Community benefit calculation methodologies
• Financial assistance reporting and related metrics
• Subsidized health services reported as community benefit
• Documentation supporting reported activities
• Roles and responsibilities across finance, community benefit, and operational teams
• Policies and procedures governing community benefit reporting

Preparing now can help reduce future reporting burdens while improving the completeness and consistency of annual Form 990 Schedule H reporting.

How Blue & Co. Can Help

Blue & Co.’s nonprofit healthcare tax professionals have extensive experience helping hospitals and health systems strengthen their community benefit reporting programs.

Our services include:

• Assessment of current community benefit calculations and methodologies to identify opportunities to enhance reported community benefit while aligning with IRS and Catholic Health Association guidance.
• Evaluation of subsidized health services and other qualifying activities that may not currently be captured.
• Development of community benefit reporting policies, procedures, and standardized methodologies across health systems.
• Calculation and analysis of the value of an organization’s tax-exempt status to support communications with boards, legislators, and other stakeholders.
• Operational reviews of community benefit functions, including governance, reporting responsibilities, budgeting, documentation, and internal processes.
• Education and customized training for finance teams, community benefit leaders, executive leadership, and governing boards.
• Assistance with facility-level reporting methodologies that may become increasingly important under future reporting requirements.
• Every organization is different. Our approach is tailored to each client’s structure, reporting practices, and strategic objectives.

Additional Resources

To learn more about the proposed legislation:

• Joint Committee on Taxation – Description of H.R. 9504:
  https://www.jct.gov/publications/2026/jcx-26-26/
• Blue’s Community Benefit Consulting Services:
  https://www.blueandco.com/services/consulting-services/healthcare-consulting/community-benefit-consulting/

Blue & Co. has worked with health systems nationwide to strengthen community benefit reporting, improve reporting methodologies, conduct operational assessments, develop reporting policies and procedures, calculate the value of tax-exempt status, and provide education to community benefit professionals, finance teams, executive leadership, and governing boards.

As scrutiny surrounding nonprofit hospitals continues to evolve, having a comprehensive and well-documented community benefit strategy has never been more important.

To learn more about Blue & Co.’s community benefit consulting services, contact our nonprofit healthcare tax consulting team or visit your Blue & Co. representative for additional information.

Kim Scifres, CPA, Principal
kscifres@blueandco.com
502-992-3511

Luke Lamb, CPA, Senior Manager
llamb@blueandco.com
502-461-8543

Emilie Knieriem, CPA, Senior Manager
eknieriem@blueandco.com
502-461-8512