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Regulation and Compliance > Federal Regulation > IRS

PPACA: IRS Eyes Nonprofit Hospitals

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The Internal Revenue Service (IRS) is starting to look to see whether tax-exempt hospitals are conducting enough community benefit activities to justify their exemptions.

The IRS began revew of the hospitals’ community benefit activities April 6, according to analysts at the Deloitte Center for Health Solutions, Washington.

The reviews are required by Section 9007 of the Patient Protection and Affordable Care Act (PPACA).

PPACA Section 9007 requires the IRS to conduct the hospital reviews every 3 years,Detective the Deloitte analysts say.

“The IRS will not notify hospitals under review, nor is it likely to contact them for additional information,” the analysts say. “Hospitals may be referred for complete examination based on results of the review.”

PPACA Section 9007 requires a tax-exempt hospital to:

  • Conduct community health needs assessment every 3 years.
  • Establish a financial assistance policy and a policy relating to charges for emergency care.
  • Charge patients eligible for financial assistance a price comparable to what they would charge insured patients.
  • Make reasonable efforts to determine whether a patient is eligible assistance before engaging in “extraordinary collection actions,” such as lawsuits or liens on residences.

Other hospital coverage from National Underwriter Life & Health:


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