Re­vamp of IRS rules urged

Not-for-profit hos­pi­tals want clear, us­able guid­ance

Modern Healthcare - - The Week In Healthcare - Me­lanie Evans

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

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