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
Bundled Payments for Care Improvement – Advanced (BPCI-A) is the Center for Medicare and Medicaid Innovation’s (CMMI) latest voluntary alternative payment model (APM), and it is garnering a great deal...
Read More

Choosing Wisely – BPCI-A Episode Selection Due August 1

About one-third of all hospitals and clinicians now participate in the Medicare Shared Savings Program (MSSP).  For those considering participation, the Centers for Medicare & Medicaid Services (CMS) offers a...
Read More

While You Are Waiting: Getting Ready to Apply for the MSSP

PYA has released a new white paper explaining how competing health systems may overcome antitrust obstacles to merger by formally committing to population health improvement in the communities they serve....
Read More

PYA White Paper Explains How Pro-Competitive Impacts of Hospital Consolidation Can Overcome Antitrust Concerns

PYA announces that Marci Nielsen, Ph.D., has joined as a Principal within its Consulting service line. Marci Nielsen has a passion for equitable, person-centered care.  Given her background, with -...
Read More

Health policy expert Marci Nielsen, Ph.D., noted for putting patients in the center of healthcare, is the newest principal at PYA.

PYA Principals David McMillan, Michael Ramey, and Martie Ross authored an article that was recently published in the AHLA Transactions Guide.  The article, “Overcoming Antitrust Obstacles to Mergers by Committing...
Read More

Overcoming Antitrust Obstacles to Mergers by Committing to Population Health Improvement

PYA has released a new white paper offering healthcare organizations guidance for conducting claims-based reviews in light of the U.S. Department of Health and Human Services Office of Inspector General’s...
Read More

PYA White Paper Offers Guidance for Conducting Claims-Based Reviews of Inpatient Quality Reporting Data and the Link Between Payment and Quality

According to its tagline, Atlanta Business RadioX spotlights “the city’s best businesses and the people who lead them.”   PYA is pleased to share that one of its own, Consulting Principal...
Read More

PYA’s Lori Foley Shared Insight in Live Radio Interview

The recent Tax Cuts and Jobs Act (TCJA) imposes a limit on deductions for business interest for taxable years beginning in 2018.  The limit, like other aspects of the law,...
Read More

IRS Sheds Light on New Limit on Business Interest Expense Deductions

PYA has released a new white paper that offers a “how to” guide for providers seeking Medicare reimbursement of remote patient monitoring. The paper provides step-by-step instructions on how providers...
Read More

PYA White Paper Offers Guidance for Providing and Billing Medicare for Remote Patient Monitoring

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