US Code

Public Law 119-102 (07/12/2026)

42 U.S.C. § 1320b–4

Nonprofit hospital or critical access hospital philanthropy

Section text and notes

For purposes of determining, under subchapters XVIII and XIX of this chapter, the reasonable costs of services provided by nonprofit hospitals or critical access hospitals, the following items shall not be deducted from the operating costs of such hospitals or critical access hospitals:
(1)
A grant, gift, or endowment, or income therefrom, which is to or for such a hospital and which has not been designated by the donor for paying any specific operating costs.
(2)
A grant or similar payment which is to such a hospital, which was made by a governmental entity, and which is not available under the terms of the grant or payment for use as operating funds.
(3)
Those types of donor designated grants and gifts (including grants and similar payments which are made by a governmental entity), and income therefrom, which the Secretary determines, in the best interests of needed health care, should be encouraged.
(4)
The proceeds from the sale or mortgage of any real estate or other capital asset of such a hospital, which real estate or asset the hospital acquired through gift or grant, if such proceeds are not available for use as operating funds under the terms of the gift or grant.
Paragraph (4) shall not apply to the recovery of the appropriate share of depreciation when gains or losses are realized from the disposal of depreciable assets.

Aug. 14, 1935, ch. 531 Pub. L. 96–499, title IX, § 901(a)94 Stat. 2611 Pub. L. 97–35, title XXI, § 2193(c)(6)95 Stat. 827 Pub. L. 97–248, title I, § 137(b)(5)96 Stat. 377 Pub. L. 101–239, title VI, § 6003(g)(3)(D)(iii)103 Stat. 2153 Pub. L. 105–33, title IV, § 4201(c)(1)111 Stat. 373 (, title XI, § 1134, as added , , ; amended , , ; , , ; , , ; , , .)

Editorial Notes

Amendments

Pub. L. 105–331997— substituted “critical access” for “rural primary care” in two places in introductory provisions.

Pub. L. 101–2391989— substituted “hospitals or rural primary care hospitals” for “hospitals” in two places in introductory provisions.

Pub. L. 97–2481982—Par. (4). substituted “sale” for “scale”.

Pub. L. 97–351981— substituted “subchapters XVIII and” for “subchapters V, XVIII, and” in provision preceding par. (1).

Statutory Notes and Related Subsidiaries

Effective Date of 1997 Amendment

Pub. L. 105–33section 4201(d) of Pub. L. 105–33section 1395f of this titleAmendment by applicable to services furnished on or after , see , set out as a note under .

Effective Date of 1982 Amendment

Pub. L. 97–248Pub. L. 97–35section 137(d)(2) of Pub. L. 97–248section 1396a of this titleAmendment by effective as if originally included as part of this section as this section was amended by the Omnibus Budget Reconciliation Act of 1981, , see , set out as a note under .

Effective Date of 1981 Amendment, Savings, and Transitional Provisions

Pub. L. 97–35section 2194 of Pub. L. 97–35section 701 of this titleFor effective date, savings, and transitional provisions relating to amendment by , see , set out as a note under .

Effective Date

Pub. L. 96–499, title IX, § 901(b)94 Stat. 2611

“The amendment made by subsection (a) [enacting this section] shall apply to grants, gifts, and endowments, and income therefrom, made or established after the date of the enactment of this Act [].”
, , , provided that: