Revamp of IRS rules urged
Not-for-profit hospitals want clear, usable guidance
The Internal Revenue Service likely won’t jettison new hospital reporting rules as required under the health reform law, but that has not stopped hospitals and healthcare finance executives from insisting on broad changes to it.
In a letter to the IRS commissioner for taxexempt organizations, the American Hospital Association, Healthcare Financial Management Association and the VHA, a prominent network of not-for-profit hospitals, urged tax regulators to make multiple changes to rules released in February for not-for-profit hospital reporting on billing and financial aid policies and community needs assessments in the Form 990 Schedule H.
“We hope the IRS will act with dispatch to withdraw and reissue the form, improve the instructions and issue clear and useable guidance,” the letter said, which was also endorsed by hospital associations in 10 states. The newly required reporting is “burdensome” and “carelessly redundant,” the groups argued.
Douglas Anning, a not-for-profit and health- care attorney with Polsinelli Shughart in Kansas City, Mo., said regulators may respond with new guidance, but any wholesale revamp— should tax regulators agree to such changes— would likely not come ahead of the first year’s reporting considering the required resources.
Nor are tax regulators required to adopt proposed changes through regulations, said Anning, one of the criticisms levied by the hospital and healthcare finance organizations, who argued such procedures, which allow for public notice and comment, are “standard.” The IRS did solicit comment in May 2010 on its interpretation of new disclosure provisions. Hospitals must already report other newly added questions, the groups contend, creating unnecessary work. The letter included a mock form with proposed changes to address the industry’s concerns written in by hand.
Hospitals also have little leverage to insist