Healthcare

As discussed in my previous blog post, the IRS is ramping up compliance audits of governmental hospitals who are exempt under 501(c)3. However, the IRS isn’t the only one monitoring your tax-exempt hospital. Other organizations have started policing these requirements.

Is your governmental hospital exempt under Section 501(c)3? If you have a 403(b) plan, the answer is yes; and even if you don’t—you need to check. 

Community Health Needs Assessments (CHNA), unfortunately for many, are conducted simply to fulfill the Section 501(r) of the Internal Revenue Code which requires a tax-exempt hospital to conduct a CHNA. Also, community health assessment is a prerequisite of public health accreditation under PHAB standards. As we have discussed in a previous blog, a hospital’s CHNA can achieve so much more than fulfilling a regulatory obligation.

There is growing recognition that the social determinants of health—where we live, work, and play; the food we eat; the opportunities we have to exercise; our ability to live in safety—drive health outcomes. Of course, there is a large role for health care to play in delivering health care services, but it is indisputable that the foundation of a healthy life lies within the community. To manage true population health—that is, the health of a community—hospitals and healthcare systems must partner with a broad spectrum of stakeholders who share ownership for improving health in our communities. 

Non-profit hospitals should take notice of changes the IRS has made in its Draft 2014 Form 990 Schedule H. The IRS is trying to make its Schedule H more closely mirror requirements in the Affordable Care Act, section 501(r). In particular, the updated draft form requires more commentary so that the IRS can get quicker visibility into whether hospitals are living up to the true purpose of the Community Health Needs Assessment (CHNA) regulations. Here are some key points to note in the updated form:
 
More specificity in check-the-box questions
 
501(r) details that a hospital must adopt an implementation strategy to meet the needs identified in the CHNA by the end of the same taxable year in which the CHNA was conducted. The Draft Schedule H now asks for the tax year in which the CHNA was adopted and either a link to or a copy of the implementation strategy. This updated draft also provides clarity to the IRS about allowable exceptions that might be missed in a simple review of previous forms.