IRS issues NPRM on new requirements for charitable 501(r) hospitals regarding financial assitance and emergency medical care
Posted on June 22, 2012 | Comment (1)
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The Department of Treasury’s Internal Revenue Service (IRS) released a notice of proposed rulemaking (NPRM) providing guidance regarding the requirements for charitable hospital organizations relating to financial assistance and emergency medical care policies, charges for certain care provided to individuals eligible for financial assistance, and billing and collections. The regulations reflect changes to the law made by the Affordable Care Act (ACA). The regulations will affect charitable 501(r) hospital organizations.
Comment (1)
April 3, 2013
The Affordable Care Act (ACA) mandates that charitable hospitals perform community health needs assessments (CHNA). The proposed rule released by the Internal Revenue Service (IRS) provides guidance on specific components of the CHNA, including related excise tax and reporting obligations, as well as clarification on consequences of failing to meet CHNA and other requirements.
August 10, 2012
Today, the Internal Revenue Service, a branch of the Department of Treasury, released a one pager correction to the June notice of proposed rulemaking regarding requirements for charitable hospitals. The NPRM contains proposed regulations that provide guidance regarding the requirements for charitable hospital organizations relating to financial assistance and emergency medical care policies, charges for certain care provided to individuals eligible for financial assistance, and billing and collections. The regulations reflect changes to the law made by the Affordable Care Act (ACA).
January 6, 2012
The Internal Revenue Service (IRS) has issued a draft Schedule H and accompanying instructions for tax-exempt hospitals. As required by the Affordable Care Act (ACA), non-profit hospitals must respond to questions on financial assistance policies, billing and collection practices, emergency medical care, and individuals eligible for financial assistance, beginning with the 2011 tax filing year. The draft instructions have been revised to more clearly follow the statutory provision of Section 501(r) of the Internal Revenue Code. Several of the changes relate to billing and collections.
For more information on tax-exempt hospital requirements, click here and here.
August 23, 2011
On July 7, 2011, the Treasury Department and the Internal Revenue Service (IRS) published a Notice and Request for Comments on a proposed policy regarding the Affordable Care Act’s new requirements related to tax exempt hospitals’ community health needs assessment (CHNA) obligations. Section 9007 of the Act added new Section 501(r) to the Internal Revenue Code, which delineates a series of statutory requirements, outlined in a previous implementation brief, applicable to nonprofit hospitals that seek tax-exempt status under Section 501(c)(3). The purpose of the Treasury/IRS Notice is to both describe the agencies’ approach to implementing hospital organizations’ CHNA obligations and to invite comments regarding their proposals. The CHNA requirements are effective for taxable years beginning after March 23, 2012. However, the Notice specifies that hospitals currently engaged in conducting CHNA-related activities -- including development and wide publication of a needs assessment and adoption of an implementation strategy -- can rely on the policies contained in the Notice as they move forward.
August 17, 2011
The Treasury Inspector General for Tax Administration (TIGTA) recently performed an audit on the Affordable Care Act (ACA) and the the Health Care and Education Reconciliation Act of 2010. TIGTA performed the audit to review the Tax Exempt and Government Entities (TE/GE) Division's initial planning activities for ACA implementation. The TIGTA review did not identify any concerns relating to the methodology the TE/GE Division is using to monitor and coordinate planning efforts.
August 21, 2012
After the Affordable Care Act (ACA) is fully implemented, an estimated twenty-three million people will remain uninsured. Safety-net hospitals will thus continue to play a critical role in the US health care system. However, such hospitals will likely have less federal and state support for uncompensated care. Safety-net hospitals will need to reposition themselves in the marketplace to compete effectively for newly insured people who will have a choice of providers. A new article published in Health Affairs examines how five leading safety-net hospitals have begun preparing for reform. Building upon strong organizational attributes such as health information technology and system integration, the study hospitals’ preparations include improving the efficiency and quality of care delivery, retaining current and attracting new patients, and expanding the medical home model.
July 9, 2012
On June 22, 2012, the Internal Revenue Service and Treasury Department released for public view a notice of proposed rulemaking (NPRM) regarding the obligations of nonprofit hospitals seeking federal tax-exempt status. The NPRM deals with that portion of the ACA related to the obligation of nonprofit hospitals to maintain financial assistance and emergency medical care policies, as well as certain billing and collection policies, as a condition of federal tax exemption. The NPRM comment period will be for 90 days following Federal Register publication. The agencies have identified...
August 23, 2011
On July 7, 2011, the Treasury Department and the Internal Revenue Service (IRS) published a Notice and Request for Comments on a proposed policy regarding the Affordable Care Act’s new requirements related to tax exempt hospitals’ community health needs assessment (CHNA) obligations. Section 9007 of the Act added new Section 501(r) to the Internal Revenue Code, which delineates a series of statutory requirements, outlined in a previous implementation brief, applicable to nonprofit hospitals that seek tax-exempt status under Section 501(c)(3). The purpose of the Treasury/IRS Notice is to both describe the agencies’ approach to implementing hospital organizations’ CHNA obligations and to invite comments regarding their proposals. The CHNA requirements are effective for taxable years beginning after March 23, 2012. However, the Notice specifies that hospitals currently engaged in conducting CHNA-related activities -- including development and wide publication of a needs assessment and adoption of an implementation strategy -- can rely on the policies contained in the Notice as they move forward.
December 20, 2010
This implementation brief examines the addition of Section 501(r) to the Internal Revenue Code under the Affordable Care Act (ACA), which sets out new requirements for not-for-profit, tax-exempt hospitals.
December 20, 2010
Section 501(r) is Congress’ first attempt since 1969 to put more “teeth” into the exemption standards for tax-exempt hospitals. While well-meaning, the statute is poorly drafted and leaves the IRS in a difficult position of having to administer a statute with significant structural problems.
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Dear colleagues:
I am the Chief of a County public health department that performs eligibility and financial assistance counseling for low-income residents in need of healthcare, and also operates a public hospital and clinic system that interacts with all of the nonprofit hospitals in our community. We have experience in working under a State rubric for financial assistance policies for nonprofit hospitals that was enacted in California in 2006. Based on this experience and our hopes for the Affordable Care Act’s reach and effectiveness in addressing the needs of low-income residents, we offer the following comments:
1) We recommend that hospitals are required to provide charity care (i.e., at no cost) to individuals with incomes below 138% of the Federal Poverty Level. Given this threshold for the extension of Medicaid eligibility under the ACA, such a requirement aligns the ACA’s expectation that the poorest residents have some protection from financial ruin due to illness.
2) We also recommend that the billing threshold applicable to patients to whom hospitals are extending discounted care as part of their community benefit program be required to use the amount paid by Medicare rather than the look-back option that considers all insurers’ payments for calculating the Amount Generally Billed (AGB) to insured patients receiving such care.
3) If the IRS allows hospitals to use the Amount Generally Billed (AGB) as their basis for billing patients to whom they are extending discounted/charity care, we recommend that hospitals be required to include the amount billed to Medicaid in calculating their AGB. It would be inaccurate to exclude Medicaid payments in this calculation.
4) Finally, we recommend that hospitals be required, within their Financial Assistance Policies and notices to patients about the availability of such policies, information regarding how to obtain affordable health insurance through the ACA, such as through links to the State-based or Federal Exchange that can inform patients about their eligibility for Advance Premium Tax Credits and/or public health insurance coverage programs.
Thank you for your consideration.
Jean S. Fraser
Chief
San Mateo County Health System