Hospital Competition and Restrictions on Physician-Owned Hospitals

A reminder of the dire consequences of hospital monopolies and some recommendations from Joel C. White, the President of the Council for Affordable Health Coverage:

https://www.realclearhealth.com/articles/2026/04/27/the_monopoly_tax_on_your_health_insurance_1179219.html

The Monopoly Tax on Your Health Insurance
By Joel C. White - April 27, 2026

On Tuesday, the House Ways and Means Committee will seat the chief executives of America's largest health systems and ask them to explain why health care costs keep climbing. Chairman Jason Smith and his colleagues should put a sharper question to the witnesses: what will it take to restore competition in hospital markets and affordability to American consumers?

America is in the grip of a health care affordability crisis. Employer plan costs are projected to rise faster than at any point in 15 years. By 2032, the typical family could spend nearly 40 percent of household income on health insurance alone, up from 20 percent this year. This is unacceptable.

The single biggest reason is hiding in plain sight: the hospital across town has been quietly swallowing up its competitors.

In 1970, about 90 percent of U.S. hospitals stood on their own. Today, only one in five does. Eight in ten hospitals are now part of a consolidated system, and those systems control 93 percent of acute care beds. One or two systems control the entire inpatient market in nearly half of America's metropolitan areas. A full 97 percent of hospital markets are uncompetitive according to federal antitrust guidelines.

Roughly one in four U.S. physicians worked for a hospital in 2013; today, nearly four in five work for a hospital or another corporate entity such as an insurer. And when a hospital buys a physician's office and rebrands it as a "hospital outpatient department," Medicare pays more for the same service, while patients pay facility fees of $75 to $100 for the same care, in the same exam room, from the same doctor. None of this makes anyone healthier. All of it makes care more expensive.

This is not a functioning market. It is a patchwork of local monopolies where patients, employers, and taxpayers are paying the bill.

The consequences are measurable and severe. Hospital mergers in concentrated markets raise commercial prices by 20 to 40 percent, with no improvement in mortality, quality, or patient experience. Market power leads to higher prices that translate into more spending.

Hospital care is the single largest category of health spending — 31 percent of every health care dollar, or roughly $1.8 trillion in 2025 — and it is rising faster than wages or general inflation. Insurers build those costs directly into next year's premiums. For the family writing that check, consolidation is a tax.

The Trump administration has started using the tools it already has to restore competition. In February, the Department of Justice and Ohio's attorney general sued OhioHealth for using "all-or-nothing" contracts to force insurers to include every one of its facilities in their networks - blocking payers from designing lower-cost, budget-conscious plans. In March, DOJ brought a similar Sherman Act case against New York-Presbyterian, the dominant system in New York City.

DOJ and the FTC should continue to aggressively use their authority against anticompetitive conduct and, where warranted, unwind the mergers that produced today's local monopolies.

But Congress must do its part. For too long, lawmakers have been pouring hundreds of billions of taxpayer dollars into ever-larger premium subsidies to insurers instead of expanding competitive markets that would lower premiums and premium subsidies.

Tuesday's hearing is a chance to change that. Three reforms would make a meaningful difference, and Ways and Means has jurisdiction over all of them.

First, pass the Healthy Competition for Better Care Act. The bill, introduced by Rep. Jodey Arrington, prohibits the anticompetitive contract terms - anti-steering, anti-tiering, and all-or-nothing clauses - that DOJ is now forced to challenge one defendant at a time. CBO scores it at nearly $5 billion in savings.

Second, stop rewarding size. The 340B drug discount program, originally created to help safety-net hospitals care for low income patients, has grown more than sixfold since 2010 to more than $80 billion. Much of that money flows to large nonprofit systems that provide little charitable care while using 340B margins to acquire more physician practices, fueling the very consolidation that raises prices everywhere else. Congress should require hospitals to meet a meaningful charitable-care threshold to qualify for 340B and tax exempt status, while aligning reimbursement more closely with acquisition costs.

Third, expand supply. Current law bars new physician-owned hospitals from receiving Medicare payment - suppressing competition. Evidence consistently shows these facilities deliver strong clinical outcomes at lower prices. The ban should be lifted, and Congress should similarly clear the runway for ambulatory surgery centers and other lower-cost sites of care.

These reforms rely on the basic rules of competition that work in every other sector of the economy: when markets concentrate, prices rise; when incumbents are forced to compete, prices fall. The hospital sector is not exempt from this logic it has just been insulated from it.

When the CEOs sit before Ways and Means on Tuesday, they will defend the current system. Congress should not. More taxpayer subsidies funneled to the same consolidated players who drove prices up in the first place will not deliver affordable coverage, competition will. The administration has started the work. It is time for Congress to finish it.

The Healthy Competition for Better Care Act:

https://www.congress.gov/committee-report/118th-congress/house-report/875

https://arrington.house.gov/news/documentsingle.aspx?DocumentID=4223

https://www.husted.senate.gov/media/press-releases/husted-leads-bill-to-combat-anti-competitive-health-care-practices/

Arrington Fights to Lower Health Care Costs, Increase Transparency
Press Release - Washington, November 21, 2025

Washington, D.C. – Today, House Budget Chairman Jodey Arrington (TX-19) introduced the Healthy Competition for Better Care Act, bipartisan legislation to promote transparency in health care, crack down on anti-competitive practices, and remove restrictions preventing competition in health care markets.

“Americans are paying too much for too little health care,” said Chairman Arrington. “My Healthy Competition for Better Care Act cracks down on anti-competitive practices, removes unnecessary restrictions, and gives patients the freedom to find better-quality and lower-cost care. This bipartisan legislation puts hardworking families first, ensures fair competition, and puts patients, not bureaucrats, back in charge of their health care.”

“I have often said that the best way to lower health care costs for hardworking Americans is to enhance competition in the marketplace. For too long, anti-competitive practices have driven up premiums and out-of-pocket costs while simultaneously limiting consumers’ ability to choose the health care plan that meets their needs,” said Congressman Rick W. Allen. “The Healthy Competition for Better Care Act proposes comprehensive reforms to improve our flawed system by increasing transparency, fostering greater competition, expanding access to quality care, and lowering skyrocketing health care costs. I thank Representative Arrington for his leadership on this legislation and look forward to its consideration by the Education and Workforce Committee.”

“PBGH strongly supports Rep. Arrington’s reintroduction of the Healthy Competition for Better Care Act, which will increase health care affordability by prohibiting anticompetitive business practices and removing restrictions that are obstacles to true competition in health care markets,” said Elizabeth Mitchell, CEO of PBGH. “The procompetitive reforms in this bill will enable our purchaser members – who through PBGH’s Health Care Data Demonstration Project have identified higher-quality, lower-cost providers – to steer their plan members more freely to higher-value providers and form direct contracts. We look forward to continuing to work with Reps. Arrington, Davis, and Allen to ensure the bill delivers the greatest possible impact on cost and quality for America’s workers and families.”

“Texas has taken major steps to eliminate anti-competitive practices in health care, but employers and families still face federal barriers that drive up costs. Congressman Arrington’s legislation brings the same pro-competition, pro-transparency reforms to the national level by cutting back outdated restrictions that inflate prices and limit patient choice,” said Faith Villarreal, Government Affairs Director of Texas Association of Business. “By allowing insurers, employers, and providers to negotiate freely and reward patients who choose high-value care, this bill promotes the kind of market competition that lowers costs and improves outcomes. Texas businesses strongly support these efforts to deliver a more affordable, transparent, and competitive health care system.”

“Making health care more affordable for working families is critically important and the Alliance to Fight for Health Care applauds the bipartisan reintroduction of the Healthy Competition for Better Care Act, which will help reduce health care costs for patients,” said Heather Meade, Alliance to Fight for Health Care. “Prohibiting anti-competitive contracting will improve access to higher quality, lower cost care and is an important step in improving the health care system for all Americans.”

“The only way to lower health care costs effectively is by addressing the root causes of rising prices – including anti-competitive contracting that stifles choice and competition,” said Ilyse Schuman, American Benefits Council, Senior Vice President, Health and Paid Leave Policy. “The bill introduced today by Representatives Arrington, Davis and Allen will help lower costs by promoting competition in the health care market and employer innovations that prioritize high-value care. We applaud them for their leadership and urge Congress to pass this legislation.”

“Health care costs are too high, premiums continue to grow, and consumers too often lack real power or choice in the system. The problem is we no longer have competitive health markets in America,” said Joel White, President of the Council for Affordable Health Coverage.“As big insurers and health systems increase their market power, prices increase by double digits. If current trends persist, the typical American family will spend 40 percent of their income on health premiums. Your bill takes direct aim at these entrenched barriers. By promoting competition, enhancing transparency, and freeing plans and providers to contract more flexibly, it offers a concrete path toward lower costs and better outcomes. The Council for Affordable Health Coverage looks forward to working with you to enact this bill into law.”

“ERIC strongly supports the "Healthy Competition for Better Care Act" because it promotes transparency, eliminates anti-competitive barriers, and empowers patients to choose high-quality, lower-cost care,” said Melissa Bartlett, Senior Vice President of Health Policy at The ERISA Industry Committee. “Encouraging these value-driven provider partnerships is essential to helping employers and employees access the best care at the best prices. We applaud Representatives Arrington, Davis and Allen for introducing the legislation and look forward to working with them to advance more affordable health care solutions.”

“Right now, working families are struggling more than ever under the crushing burden of unaffordable health care, groceries and other basic necessities, and they are begging Congress for relief,” said Sophia Tripoli, Senior Director of Health Policy at Families USA. “Only Congress has the power to advance bipartisan solutions that will hold corporate health systems accountable for charging excessive health care prices - a primary driver of our nation's health care affordability crisis. The Healthy Competition for Better Care Act is commonsense and bipartisan legislation that would rein in monopoly power, open access to higher-quality, lower-cost care, and reduce wasteful health care spending. Families USA applauds Representatives Arrington (R-TX), Davis (D-NC), and Allen (R-GA) for leading on this critical step to make health care more affordable for our nation's families.”

“Amid the debates on Capitol Hill on how to address rising health care costs, it is promising to see a bipartisan group come together with a smart and timely proposal to lower hospital costs,” said Darbin Wofford, Deputy Director of Health Care at Third Way. “Sky-high hospital prices are one of the key reasons behind the rising cost of health care. The Healthy Competition for Better Care Act would take on anti-competitive behavior in hospital contracting, which would lower costs for patients, employers, and taxpayers. Third Way is a proud supporter of this legislation and thanks Congressmen Jodey Arrington, Don Davis, and Rick Allen for their leadership.”

Background:

• The legislation promotes transparency in health care, cracks down on anti-competitive practices, and removes restrictions preventing competition in health care markets. In all, making health care better for patients and lowering health care costs.
• The legislation enables more group health plans and health insurance issuers to enter into agreements with providers that guide enrollees to high-value providers and provide incentives to encourage enrollees to seek higher-quality, lower cost care.
• The legislation was scored last Congress and saved $4.9B over 10 years and lowered insurance premiums by 0.1%.

The all powerful U.S. House Ways and Means Committee held a hearing yesterday which took testimony from the CEOs of four major hospital chains.  The underlying topic was the anticompetitive consolidation occurring in the health care industry and its role in surging prices:

https://thehill.com/homenews/house/5853987-gop-hearing-hospital-costs/

GOP takes aim at hospital CEOs over affordability crisis
By Nathaniel Weixel - April 28, 2026

House Republicans during a Tuesday hearing blamed hospital and health systems for high health costs, excoriating a group of CEOs for exorbitant benefits packages, large profit margins and mergers.

“Our communities are better off with hospitals in them, but large health systems have taken advantage of that reality,” Ways and Means Committee chairman Jason Smith (R-Mo.) said. “Simply put, hospitals are charging an insane amount for care.”

Hospitals are one of the primary drivers of increased health spending, accounting for about 31 percent of all health care costs, according to the most recent federal data. Smith noted that hospital prices have skyrocketed 300 percent in just over two decades.

“When hospitals have no competition, it’s no wonder that the sky seems to be the limit for prices,” Smith said.

Smith even floated the idea of site-neutral payment policy, which would cut hospital outpatient Medicare payments to the same level as a doctor’s office.

Previous site-neutral legislation has been bipartisan, but hospitals argued it would cost them billions of dollars and fought tooth and nail to kill the proposals.

The hearing featured the CEOs of HCA Healthcare, the largest for-profit health system in the country; CommonSpirit Health, the largest Catholic hospital chain; New York-Presbyterian, one of the wealthiest health systems; and ECU Health, a large rural system in North Carolina.

It was the latest in a series of GOP-led hearings pressuring different representatives of the health care system over high prices. Lawmakers earlier this year grilled executives from insurance companies and the pharmaceutical industry, who pointed fingers at hospitals.

The hearings show Republicans are acutely aware that affordability is a top issue among voters ahead of the midterm elections and are willing to show they are holding accountable the corporations and executives they were once allied with.

Rep. Greg Murphy (R-N.C.) asked the chief executive of HCA Healthcare “why we should allow for-profit systems to exist.”

Murphy, a practicing urologist and co-chair of the GOP Doctors’ Caucus, said he understands costs have gone up, and there is uncompensated care.

But he noted executive compensation has also risen, and there’s no excuse for companies making exorbitant profits for shareholders who have no connection to health care.

“I don’t want to sound like a communist; I’m not. I’m a capitalist at heart,” Murphy added. “But if we now have institutions that put profits above patients … we have to rethink this model.”

Democrats though, cast the hearing as a Republican attempt to deflect from the massive Medicaid cuts that paid for last year’s One Big Beautiful Bill.

“Families won’t be fooled so easily. They know Republicans are desperate to distract from their record of failure,” said Rep. Richard Neal (D-Mass.), the panel’s ranking member.

“They ripped coverage from more than 15 million people and pushed hundreds of hospitals to the brink — and now they want credit as states scramble for scraps from their Ugly Law’s so-called rural hospital fund, a meager lifeline that won’t undo their damage and wouldn’t be needed if Republicans hadn’t gutted the system in the first place,” Neal said.

The hospital executives argued the higher reimbursement is necessary just to cover their overhead costs.

The executives cast blame for high costs on insurers for low reimbursement rates, especially amid rising inflation.

“When it comes to fixing the system, the only thing you all agree on, really, is that some other people, other issues — that’s the increase,” Smith said.

House Ways and Means Committee Chairman Jason Smith (R-MO) didn't mince words in an interview with CNBC this morning:

https://waysandmeans.house.gov/2026/04/28/icymi-chairman-smith-on-squawk-box-not-for-profit-hospitals-look-like-hedge-funds-with-hospital-beds/

ICYMI: Chairman Smith on Squawk Box: Not-for-profit hospitals “look like hedge funds with hospital beds.”
April 28, 2026

WASHINGTON, D.C. – Ways and Means Committee Chairman Jason Smith (MO-08) joined CNBC’s Squawk Box ahead of a full Committee hearing with hospital system CEOs, highlighting the Committee’s ongoing, aggressive push to hold health care empires accountable for the rising cost of and lack of access to health care in America.

Interview Excerpts

On the Ways and Means Committee’s work to make health care more affordable and accessible…

“This is all part of a series of looking into various aspects of health care – of how it’s broken, how it needs to become more affordable and accessible. We had the five largest health insurance CEOs before our Committee just a few months back – they pointed blame to the hospital CEOs as why individuals’ health care costs are going up.”

On the 14,000% increase in urban hospitals exploiting loopholes to get benefits meant for rural communities…

“Not too far from you, Andrew, in Manhattan, New York-Presbyterian, who’s testifying today, they have their flagship hospital designated as a rural hospital. I don’t think Manhattan’s rural, but they’re using it as a loophole to get billions of dollars from what should be going to rural independent hospitals. And this is a loophole over the last 6 years that we’ve discovered has went from three hospitals doing it to 425 different hospitals. That’s a 14,000% increase!”

On hospitals charging outrageously more for the same service…

“We had a gentleman in Florida who had an emergency CT scan. It cost him $13,000, but then he did a follow-up in a medical practice – it was $79. These kinds of outrageous discrepancies are just unacceptable and we have to address them.”

On not-for-profit hospitals acting more like hedge funds…

“I would say that not-for-profit hospitals… look like hedge funds with hospital beds because of how they’re acting.”

On consolidation and health care empires…

“I think the vertical integration within the health care system… is a complete disaster. For example, the health insurers testified before our Committee just a few months ago that they not only are health insurers, but they’re PBMs, they’re pharmacies, they own medical practices. Even one of them owns a bank, but they’re ‘health insurers?’ No, they’re health care empires.”

The case for physician-owned hospitals (POHs) as stated by Katherine Hall, a Research Assistant at Paragon Health Institute:

https://paragoninstitute.org/paragon-prognosis/let-affordable-hospitals-compete-lift-restrictions-on-physician-owned-hospitals/

Let Affordable Hospitals Compete: Lift Restrictions on Physician-Owned Hospitals
By Katherine Hall - May 6, 2026

Chefs can own restaurants. Lawyers can own law firms. Yet for sixteen years, federal law has stood in the way of doctors owning hospitals.

Physician-owned hospitals (POHs) were once a promising source of competition in rapidly consolidating hospital markets. However, the Affordable Care Act (ACA) effectively barred new POHs from opening and existing ones from expanding.

In the years since, hospital consolidation has accelerated, an increasing share of physicians has been absorbed into large hospital systems, and hospital prices have skyrocketed, far outpacing inflation. The competition that POHs were providing was effectively shut down. Policymakers should lift the ACA restrictions on POHs to increase competition and lower hospital prices.

What Are POHs?

POHs are hospitals in which a physician or immediate family member has an ownership or investment interest. The core difference between POHs and traditional hospital systems is ownership and governance: in POHs, physicians often play a direct role in administrative and operational decisions, rather than serving primarily as employees or contractors within a system run by non-physician administrators.

POHs are generally organized into two structures: general acute care hospitals, which provide a broad range of services, and specialty hospitals, which focus on one type of service—with a roughly even split between the two as of 2015.

The Case Against POHs Has Not Held Up
Early Concerns

POHs flourished prior to the ACA’s passage, growing from fewer than 70 in the early 2000s to roughly 250 by 2010. They were permitted to operate under the “whole hospital exception” to the Stark Law, which allows physicians to refer patients to hospitals in which they have an ownership interest, provided the interest is in the entire facility rather than a single department.

In the early 2000s, critics began raising concerns that physician-owned specialty hospitals would siphon off healthier and potentially more profitable patients while leaving expensive patients to be treated by community hospitals. Some worried that physicians would refer patients to their own facilities for financial gain rather than clinical need. This led Congress to implement a temporary moratorium on new specialty POHs from 2003 to 2005, during which federal agencies studied their effects.

A 2005 MedPAC report found inconclusive evidence on the impacts of specialty POHs and said that “removing the exception that allows physician ownership of whole hospitals would be too severe a remedy at this time.” It called for extending the moratorium for further study until payment changes could address concerns—changes that CMS later implemented before the ACA restrictions. A subsequent CMS study recommended disclosure requirements and payment reforms, not broad restrictions on physician ownership.

The ACA Restrictions

The ACA went far beyond imposing restrictions on specialty hospitals, preventing all new POHs from billing Medicare and freezing the capacity of existing “grandfathered” facilities (those with a Medicare provider agreement by December 31, 2010).

The law did not technically prohibit the construction of POHs, but a facility that cannot bill Medicare would face significant barriers. Medicare patients account for almost half of inpatient days nationally, and the way that Medicare pays has outsized influence on the entire health care market.

Grandfathered POHs can request an exception to expand, but the eligibility criteria are so narrow that only eight POHs have submitted formal expansion exception requests in the sixteen years since the restrictions took effect. The CEO of Texas Spine and Joint Hospital, whose $37 million expansion was blocked, said the requirements were so onerous that the current exception process amounts to “a sham.”

Following the ACA, POH growth was severely stunted, amounting to an effective stop-work order. According to the Physician Hospitals of America, 37 planned hospitals were never built, 40 construction projects were halted, and 20 major expansions were blocked.

The policy’s origins were likely less about evidence than about political pressure from the hospital lobby, which had a clear interest in suppressing a new source of competition. In 2005, the American Hospital Association (AHA) called for making the temporary moratorium on specialty POHs permanent. In 2009, the AHA and its affiliates spent more than $18 million on lobbying, and the AHA has since listed POH restrictions among its accomplishments from the law’s passage.

Reexamining the Concerns

The main concerns about POHs—self-referral, cherry-picking, and specialization harming community hospitals—were worth examining. However, evidence suggests these concerns either have not materialized or are not unique to POHs.

According to CMS, there is no clear evidence that self-referrals at POHs are driven by financial incentives. Concerns about self-referral apply to the hospital industry more broadly and not just to POHs. Physicians employed by hospitals are not restricted from making referrals to their employing hospital system—and traditional hospital systems routinely steer patients to their own facilities and use all-or-nothing contracting to force insurers to include all of their facilities in-network.

Multiple studies have found no evidence that POHs are systematically cherry-picking more profitable patients and leaving less profitable patients to community hospitals, despite this accusation remaining a persistent talking point for traditional hospital lobbyists.

Concerns about specialization in profitable services that may compete with community hospitals are unrelated to the ownership structure—not all specialty hospitals are physician-owned. Further, MedPAC reported that community hospitals maintained stable profit margins even as specialty POHs grew their admission share, and some community hospitals have acknowledged that competition from specialty hospitals had positive effects on their operations. Overall, community hospitals are not a fragile sector. Tax-exempt community hospitals already receive substantial subsidies, and the majority are profitable on their own. Concerns about community hospital viability, even where they exist in smaller or rural markets, do not justify blanket restrictions on physician ownership.

Allowing More POHs Could Improve Health Care Affordability and Patient Choice

Allowing POHs to expand and enter the market could help counter the hospital consolidation driving the health care affordability crisis. Research suggests that POHs can provide higher-quality care at lower cost than traditional hospitals, and increasing competition could put downward pressure on prices system-wide and increase patient choice.

Combating Hospital Consolidation

It is widely documented that hospital consolidation is leading to higher health care prices. In 2024, one or two hospital systems controlled the entire market in half of metropolitan areas and more than three-quarters of the market in over 80 percent of metropolitan areas. Prices are about 12 percent higher at hospitals with monopoly power than at hospitals with multiple competitors.

Hospitals are also increasingly buying up physician practices—from 2012 to 2024, the share of physicians either employed by or affiliated with hospital systems grew from 29 percent to 47 percent. After hospitals acquired physician practices, prices for those services rose by an average of 14.1 percent, with larger increases when the acquiring hospital had a larger market share.

Allowing POHs to form and expand could help counter this trend. Giving physicians another structure in which to organize and practice—one in which they maintain ownership and governance—could help them remain outside of large hospital systems and reduce the frequency of hospital acquisitions of independent practices. This could be particularly significant for inpatient services, where independent physicians currently have few options to practice outside of hospital systems.

Lower Costs, Higher Quality

Research suggests that POHs can deliver care at lower cost and equal or higher quality compared to traditional hospitals. One study comparing median negotiated commercial and cash prices at general acute care POHs and traditional hospitals found that commercial prices were 4 to 33 percent lower and cash prices were 5 to 36 percent lower at POHs. A study by the Physicians Advocacy Institute found that Medicare fee-for-service payments were 8 to 15 percent lower at POHs than at traditional hospitals for the 20 most costly diagnosis-related groups, even after adjusting for differences in patient demographics.

A systematic review of POH research found no evidence that quality outcomes are worse at POHs than at traditional hospitals. Specialty POHs providing cardiac or orthopedic care delivered higher-quality care at lower or comparable cost—including lower mortality rates and fewer complications—while general acute care POHs performed no worse on cost or quality than competitors. A study published in the BMJ found that POHs and non-POHs had similar patient experience scores, risk-adjusted 30-day mortality, readmission rates, and costs for major conditions including heart attack, heart failure, and pneumonia.

If more POHs entered the market, competition could put downward pressure on prices at traditional hospitals. And beyond cost savings, additional facilities would expand patient options for high-quality care.

Recommendations

The ACA’s restrictions on POHs went further than what agencies recommended and were shaped by the lobbying of incumbent hospital systems seeking to limit competition. Sixteen years later, the industry narrative has not held up, and POHs have demonstrated that they can deliver higher-quality care at comparable or lower prices. Meanwhile, hospital consolidation has accelerated, driving up costs for patients and taxpayers and potentially reducing quality of care.

Congress should repeal the ACA-imposed restrictions on POHs, allowing new and existing POHs to compete on the same footing as traditional hospitals. Removing these restrictions would restore a pathway for choice and competition to improve care quality and affordability. Any lingering concerns do not justify maintaining a blanket prohibition on physician ownership.

Absent repeal, CMS should reimplement its 2021 rule to ease expansion exceptions. This rule would have made it easier for existing POHs to expand, but the Biden administration moved to reverse these changes and ultimately tightened restrictions. CMS should also allow any POH, regardless of grandfather status, to participate in the Transforming Episode Accountability Model (TEAM) through its 2027 rule, opening a narrow pathway for POH growth.

House Ways & Means Advances H.R. 9504: The Tax-Exempt Hospital Transparency Act

There are similarities to Michigan House Speaker Matt Hall's four bill package to punish anti-competitive hospital practices and stifle hospital price increases:

https://washingtonreporter.news/scoop-ways-and-means-republicans-advance-hospital-transparency-bill-targeting-tax-exempt-waste-fraud-and-abuse/

https://waysandmeans.house.gov/2026/07/01/ways-means-committee-approves-legislation-protecting-taxpayer-rights-improving-irs-services-combatting-fraud-delivering-greater-nonprofit-transparency/

SCOOP: Ways and Means Republicans advance hospital transparency bill targeting tax-exempt “waste, fraud, and abuse”
By Matthew Foldi - July 8, 2026

House Republicans are moving to shine a light on what they view as a sprawling tax-exempt hospital system, advancing legislation out of the Ways and Means Committee that would require nonprofit hospitals to provide greater transparency into how they use billions of dollars in taxpayer-supported benefits.

In a 25-15 vote, the Ways and Means Committee advanced H.R. 9504, the Tax-Exempt Hospital Transparency Act; that legislation targets waste, fraud, and abuse within the tax-exempt hospital system, an issue the Washington Reporter has extensively covered. Rep. Jason Smith (R., Mo.) has previously compared some nonprofit hospital systems to “hedge funds with hospital beds.”

Critics argue that loopholes in federal law have allowed massive hospital systems to enjoy billions of dollars in tax benefits while directing money toward priorities that have little to do with providing affordable care to patients. Republicans say the Tax-Exempt Hospital Transparency Act would provide basic accountability by requiring hospitals to disclose more information about how they use those taxpayer-supported benefits.

Rep. Lloyd Smucker (R., Pa.) touted the legislation as a common sense effort to bring greater transparency to an increasingly opaque system. “It simply asks hospitals to show their work,” he said. “It requires more meaningful reporting on charity care, financial assistance, spending to address community health needs…This is transparency that shouldn’t be controversial.”

Rep. Greg Murphy (R., N.C.), a physician and co-chair of the GOP Doctors Caucus, expressed frustration that Democrats on the committee opposed the transparency legislation amid growing scrutiny of nonprofit hospital spending. “I find it troublesome…given the amount of fraud that’s now being found out around the country…that we actually are going to have folks that vote against transparency,” Murphy said. “These are American taxpayer dollars.”

Murphy also blasted nonprofit hospitals that exploit their tax-exempt status to bankroll “everything from lavish executive spending compensation, overseas investments to advertising on sports stadiums and questionable charity care.”

The committee vote comes as outside watchdog groups are escalating pressure on Washington to scrutinize the tax-exempt hospital industry.

Ahead of the hearing, watchdog group Save Our States launched a television advertisement targeting what it called the “runaway tax-exempt hospital system.” The group also released a “Glitz and Glam” report highlighting 14 examples of tax-exempt hospitals that it argues “betray patients” by “paying massive salaries to top executives and pursuing other dubious spending priorities.” The Reporter previously covered that Save Our States hosted an off-the-Hill happy hour for Trump administration and Capitol Hill staff to discuss the report’s findings.

Save Our States Executive Director Trent England also outlined the campaign in a letter to Vice President JD Vance, arguing that the tax-exempt hospital system should become a target of the administration’s broader efforts to root out waste, fraud, and abuse that harms American taxpayers.

The growing scrutiny puts nonprofit hospitals on notice as Republicans increasingly question whether some of the country’s largest hospital systems are providing enough public benefit to justify their lucrative tax exemptions.

For hospitals receiving billions of dollars in taxpayer-supported benefits, Republicans argue the new standard should be simple: show taxpayers where the money is going.