IRS re­leases pro­posed rules on billing for needy pa­tients

Modern Healthcare - - Late News -

The In­ter­nal Rev­enue Ser­vice is so­lic­it­ing pub­lic com­ment on its draft in­ter­pre­ta­tion of the pro­vi­sions in the health re­form law that af­fect how tax-ex­empt hos­pi­tals han­dle billing for needy pa­tients and what com­mu­nity-ben­e­fit projects they use to jus­tify their fa­vored tax sta­tus. The health­care re­form law added re­quire­ments in four ar­eas: com­mu­nity health needs as­sess­ments must be com­pleted ev­ery three years; fi­nan­cial as­sis­tance poli­cies for needy pa­tients must be widely pub­li­cized; hos­pi­tals can charge only their “best rates” for med­i­cally nec­es­sary care of needy pa­tients; and hos­pi­tals can­not ini­ti­ate “ex­tra­or­di­nary” col­lec­tions pro­cesses un­til they en­sure the pa­tients did not qual­ify for aid. In its no­tice, the IRS said the re­quire­ments must be fol­lowed on a fa­cil­ity-by-fa­cil­ity ba­sis for sys­tems that op­er­ate more than one hos­pi­tal. The agency also noted that fail­ure to com­plete the tri­en­nial com­mu­nity-ben­e­fit needs as­sess­ment will re­sult in a $50,000 ex­cise tax on the hos­pi­tal. The IRS is ac­cept­ing pub­lic com­ments and re­quests for guid­ance through July 22. The new rules for tax-ex­empt hos­pi­tals ap­ply to tax years be­gin­ning af­ter March 23, with the ex­cep­tion of the re­quire­ment for com­mu­nity needs as­sess­ments, which are ef­fec­tive for tax years be­gin­ning af­ter March 23, 2012.

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