New IRS Guidance Helps Tax-Exempt Hospitals Comply with ACA

Busy doctors prepering surgeryFor tax-exempt hospitals, the penalty is steep for non-compliance with Section 501 (r) of the Affordable Care Act (ACA).  Failure to comply could result in an organization’s loss of tax-exempt status.

The Internal Revenue Service has released two Notices designed to help §501(c)(3) hospitals comply with Internal Revenue Code (IRC) § 501(r).

Notice 2014-2 confirms that tax-exempt hospitals can rely on proposed regulations under section 501(r) published on June 26, 2012, and April 5, 2013, pending the publication of final regulations or other applicable guidance.

Notice 2014-3 contains a proposed revenue procedure that provides correction and disclosure procedures under which certain failures to meet the requirements of section 501(r) will be excused for purposes of sections 501(r)(1) and 501(r)(2)(B). The IRS has requested comments concerning this proposed revenue procedure; comments must be submitted by March 14, 2014.

Under Section 501(r), each tax-exempt hospital is required to satisfy these four §501(r) requirements, or risk losing its §501(c)(3) tax-exempt status:

  1. Conduct a community health care needs assessment (CHNA).
  2. Adopt a financial assistance policy.
  3. Limit charges to persons qualifying for financial assistance.
  4. Prohibit extraordinary collection actions before determining if a patient qualifies for financial assistance.

PYA is available to assist your organization with compliance and healthcare tax guidance.

 

WE ARE REQUIRED BY IRS CIRCULAR 230 TO INFORM YOU THAT THE FOLLOWING DISCUSSION WAS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, NOR RELIED UPON, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW. THE ADVICE WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THE DISCUSSION. EACH TAXPAYER SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.


Related Posts
PYA is pleased to announce the promotions of Michael Ramey, Matt Stuart, and Jeff Pate to the level of Equity Principal. PYA has announced the promotion of Senior Manager Michael...
Read More

PYA Announces Three New Equity Principals

PYA Principal Bob Paskowski is charting risk-contracting territory in an article published in the December issue of hfm Magazine, a publication of the Healthcare Financial Management Association (HFMA). Included in...
Read More

Charting Success: Key Risk-Contracting Provisions

PYA Healthcare Consulting Manager Kathryn Culver authored an article, “Changing Landscape for Health Lawyers,” which was recently published in Connections magazine, a monthly publication of the American Health Lawyers Association...
Read More

“Changing Landscape for Health Lawyers”

In today’s business environment, cloud computing arrangements play a key role in the day-to-day operations of companies large and small. The Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU)...
Read More

Clearing Up Cloud Computing Accounting

A recent article in DecisionHealth’s Part B News provides a glimpse into the future of charting patient encounters and the changes that will occur regarding Evaluation and Management (E/M) documentation....
Read More

PYA Thought Leader Quoted in Article Highlighting Potential Changes to E/M Documentation and Reporting

PYA made significant contributions to the recently released “BVR/AHLA Guide to Valuing Physician Compensation and Healthcare Service Arrangements,” which serves as the definitive guide for healthcare organizations seeking to understand...
Read More

PYA Lends Expertise in Premier Industry Publication for Valuing Physician Compensation and Healthcare Service Arrangements

An on-demand webinar, presented by Mike Shamblin, CPA, and brought to you by PYA, helps lay the foundation for the new revenue recognition standard.  The webinar guides healthcare providers of...
Read More

PYA On-Demand Webinar Outlines the New Revenue Recognition Standard in Preparation for Implementation

Gaining a deeper understanding of the legalities associated with academic medical centers (AMCs) and other teaching hospitals will be the focus this winter at the American Health Lawyers Association (AHLA)...
Read More

PYA Supports AHLA Programming for AMCs and Teaching Hospitals

PYA Senior Manager Valerie Rock authored an article, “New Payment Review Strategies: What to Do If You Receive an Outlier Coding Notice,” which was recently published in Medical Economics magazine....
Read More

“New Payment Review Strategies: What to Do If You Receive an Outlier Coding Notice”

Share This Insight

If you received value from this article, please share it with your network (e.g., Facebook, Twitter, LinkedIn). Icons below for your convenience.

Stay Current

* indicates required
Monthly eNewsletters
See more newsletter and alert options.

PYA Population Health Ascend

PYA Healthcare Blog

PYA Thought Leadership Services

The Healthcare Loop