Improving the health information technology (HIT) infrastructure of the public health system is critical for public health activities and population health management. To strengthen the public health HIT infrastructure, CMS included specific public health reporting capabilities in the Meaningful Use (MU) criteria that comprised the Electronic Health Record (EHR) incentive program for hospitals, now called the Promoting Interoperability (PI) program.Evidence suggests that these incentives have improved hospitals’ public health reporting capabilities, but recent data show that only 60% of hospitals have achieved MU standards, suggesting that barriers remain for electronic integration of hospitals with public health agencies. While progress is promising and may be indicative of improvements in electronic data exchange capabilities, the specific issues that hospitals continue to face are unclear and there remains limited understanding of approaches that may improve hospital public health reporting capabilities.This study uses cross‐sectional data from the 2017 American Hospital Association (AHA) Annual Survey and Information Technology (AHAIT) supplement, which reports the challenges hospitals face in submitting data to public health agencies. Four nonmutually exclusive options included data standards issues, technical capacity issues, uncertainty of who to send data to, and an open‐ended option. Open‐ended responses were qualitatively coded by type of challenge (ie, technology, organization, or environment); responsible/affected party (ie, hospital, public health agency, vendor, or multiple); and the specific issue described. Multivariate logistic regression was used to identify characteristics of hospitals associated with experiencing any challenge.Acute‐care, nonfederal hospitals responding to both the 2017 AHA and AHAIT supplemental surveys.Among 2,794 hospitals included, 1,713 (61%) reported experiencing at least one challenge in reporting health data to a public health agency. Of hospitals experiencing challenges, the vast majority reported organizational issues (85% or 1,458) at public health agencies (84% or 1,226), specifically the technical capacity of public health agencies. Hospital system members (adjusted odds ratio (AOR) 0.80; 95% Confidence Interval (CI) 0.65‐0.98) were less likely to experience challenges, whereas for‐profit hospitals (AOR 1.47; 95% CI 1.07‐2.03), being in the West (AOR 1.72; 95% CI 1.28‐2.30), possessing basic (AOR 1.56; 95% CI 1.06‐2.31) or comprehensive (AOR 1.57; 95% CI 1.06‐2.31) EHRs, and participating in an HIE (AOR 1.87; 95% CI 1.58‐2.22) were associated with increased likelihood of experiencing challenges.Challenges remain in facilitating data exchange between hospitals and public health agencies. Hospitals with more advanced EHRs and HIE were more likely to experience challenges. These hospitals may have technological capabilities that exceed those of public health agencies. Hospitals and public health agencies may also be in competition for a technically trained workforce, and data suggest that both may be experiencing shortages of staff with essential expertise.Efforts to alleviate barriers to hospital reporting of health data to public health agencies should target technological, organizational, and environmental issues. Responses include improvements in the data standards that facilitate exchange; funding for public health agencies to improve their technological capabilities, workforce training programs, and clarifications for PI policy specifications and reporting.