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IRS Issues Final Regulations on New Requirements for Tax-Exempt Hospitals

Reprinted from EO Update

The IRS and Department of Treasury have issued final regulations that provide guidance regarding the requirements for charitable hospital organizations added by the Affordable Care Act.

Each Section 501(c)(3) hospital organization is required to meet four general requirements on a facility-by-facility basis:

  • establish written financial assistance and emergency medical care policies,
  • limit amounts charged for emergency or other medically necessary care to individuals eligible for assistance under the hospital's financial assistance policy,
  • make reasonable efforts to determine whether an individual is eligible for assistance under the hospital's financial assistance policy before engaging in extraordinary collection actions against the individual, and
  • conduct a community health needs assessment (CHNA) and adopt an implementation strategy at least once every three years.

(The first three requirements listed above are effective for tax years beginning after March 23, 2010, and the CHNA requirements are effective for tax years beginning after March 23, 2012.) The ACA also added new section 4959, which imposes an excise tax for failure to meet the CHNA requirements, and added reporting requirements under section 6033(b) related to sections 501(r) and 4959.

These final regulations provide guidance on the requirements described in section 501(r), the entities that must meet these requirements, and the reporting obligations relating to these requirements under section 6033. In addition, the final regulations provide guidance on the consequences for failing to satisfy the section 501(r) requirements.

Reprinted from EO Update, no. 2014-21, December 31, 2014

 
Topics: Law and Regulations