Tax Analysts provides news, analysis, and commentary on tax-related topics, including the latest developments on tax-exempt healthcare organizations and hospitals. In general, tax-exempt healthcare organizations in general are classified under section 501(c)(3) and are expected to respond to the needs of their communities and to individuals who may have difficulty paying for their care. In addition to filing IRS Form 990, “Return of Organization Exempt From Income Tax” with the IRS each year, exempt hospitals also complete Schedule H, “Hospitals,” which asks about a hospital’s community building activities, community health improvement services and community benefit operations, collection practices, facilities, and the ratio of patient care to costs, among other topics.
Section 501(r), enacted in 2010 as part of the Patient Protection and Affordable Care Act, contains a number of requirements for charitable hospitals. One is that a hospital organization conduct a community health needs assessment at least once every three years and come up with an implementation strategy to meet the needs that are identified.
Also under section 501(r), a hospital organization is required to have a written financial assistance policy (FAP) and a written policy on emergency medical care. A FAP must include measures to widely publicize the FAP within the community the hospital facility serves, including posting the entire FAP on a website.
A hospital organization also must avoid use of gross charges and is required to limit amounts charged for emergency or other medically necessary care provided to individuals eligible for assistance under the organization's FAP to not more than amounts generally billed to patients with insurance covering such care. In addition, a hospital organization is required to make reasonable efforts to find out whether someone qualifies for financial assistance before taking extraordinary collection actions.
The IRS and Treasury Department released T.D. 9708 containing final regulations under section 501(r) on December 29, 2014.
Tax Analysts consistently and promptly publishes all relevant developments regarding tax-exempt healthcare organizations and hospitals.