Nonprofit hospital reforms
IRS Notice for Comment
The Internal Revenue Service (IRS) and Treasury are inviting comments on new community health needs assessment (“CHNA”) requirements for nonprofit hospitals. Comments are due by September 23, 2011.
The Internal Revenue Service (IRS) has issued guidance for tax-exempt hospitals outlined in the Patient Protection and Affordable Care Act. Section 501(r), added to the tax code by the health care law, imposes four new requirements on hospital organizations that want to qualify for tax exemption under tax code Section 501(c)(3), including:
- Conducting a community needs assessment once every three years
- Publicizing a financial assistance policy
- Prohibiting billing those who qualify for assistance at top rates
- Prohibiting extraordinary collection actions if the hospital has not made reasonable efforts to notify patients of its financial assistance policy
IRS Notice for Comment
In addition, the new law requires the IRS to review the tax-exempt status of each hospital every three years and requires the Treasury and Health and Human Services (HHS) Departments to submit an annual report to Congress on the level of charity care, bad-debt expenses, and the unreimbursed costs of means-tested and non-means tested government programs. The Treasury and HHS Departments are also required to provide a report to Congress in five years detailing trends from the annual reports.
Form 990 Filing Extension for Nonprofit Hospitals
As the IRS continues implementation
of changes to its forms and systems in accordance with the health care reform
law's new requirements for nonprofit hospitals, the agency has announced a three-month Form 990 filing extension for tax-exempt hospitals for the 2010 tax year. Details include:
- Advises hospital organizations subject to the announcement to not file before July 1, 2011.
- Extension applies only to hospital organizations that are required to file Schedule H with the 2010 Form 990 by August 15, 2011.
- Hospital organizations subject to the announcement will not have to file Form 8868, Application for Extension of Time to File an Exempt Organization Return.
- Extension does not apply to any other tax-exempt organization required to file a Form 990 return.
