Form ap­peal

Not-for-prof­its still fight­ing 990 re­port­ing poli­cies

Modern Healthcare - - The Week - Ashok Sel­vam

Even after the IRS granted them a re­prieve this year, not-for-profit hos­pi­tals con­tinue to bat­tle the ways they’re re­quired to re­port billing and col­lec­tion poli­cies to jus­tify their tax-ex­empt sta­tus.

The Amer­i­can Hos­pi­tal As­so­ci­a­tion, Health­care Fi­nance Man­age­ment As­so­ci­a­tion and VHA sub­mit­ted tips to the In­ter­nal Rev­enue Ser­vice on how to re­write the way tax-ex­empt hos­pi­tals are asked to sat­isfy re­quire­ments un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act, which in­cludes cer­ti­fy­ing that they are com­ply­ing with new re­stric­tions on billing and col­lec­tion prac­tices.

Some hos­pi­tal of­fi­cials are still con­fused by the forms, said Michael Regier, se­nior vice pres­i­dent of le­gal and cor­po­rate af­fairs and gen­eral coun­sel and com­pli­ance of­fi­cer for VHA, which pur­chases sup­plies for tax­ex­empt fa­cil­i­ties. Hos­pi­tal lead­ers are con­cerned their re­sponses won’t sat­isfy the IRS, Regier said, and that the con­se­quences of pro­vid­ing the wrong in­for­ma­tion would mean pay­ing thou­sands of dol­lars in taxes. “That’s clearly the main worry for tax­ex­empt or­ga­ni­za­tions.”

The groups sent the IRS a 23-page let­ter with line-by-line com­ments on the new section of the Form 990’s Sched­ule H. They want that section op­tional once more in fis­cal 2011. Ear­lier this sum­mer, the IRS made the section of Sched­ule H op­tional for

fis­cal 2010, say­ing hos­pi­tals needed more time to fa­mil­iar­ize them­selves with the re­quired in­for­ma­tion and “address any am­bi­gu­i­ties aris­ing from the ex­ten­sive re­vi­sions of the form and in­struc­tions.”

Mak­ing the re­port­ing op­tional an­other year would give the IRS time to get the forms right, Regier said. He noted that the groups em­pathize with the new re­spon­si­bil­i­ties placed on the IRS, and said the agency has been re­cep­tive to their sug­ges­tions.

The groups out­lined their con­cerns in a pre­vi­ous let­ter, in which they called the re­quire­ments “oner­ous and re­dun­dant” and out of step with Pres­i­dent Barack Obama’s call to elim­i­nate un­nec­es­sary reg­u­la­tions (see re­lated story, above).

The let­ter also takes is­sue with a re­vised section on the form that the groups say has un­fairly in­creased the bur­den of re­port­ing in­for­ma­tion “that had no clear re­la­tion­ship to any re­quire­ment in the law or that was clearly use­ful to the pub­lic,” re­fer­ring to a re­quested ac­count­ing of fa­cil­i­ties by size and rev­enue from largest to small­est.

The AHA, HFMA and VHA met with IRS of­fi­cials ear­lier this year to share their con­cerns. The IRS then asked the or­ga­ni­za­tions to share their sug­ges­tions to im­prove the form. Of­fi­cials from 300 hos­pi­tals pro­vided in­put for the sug­ges­tions.

An IRS spokes­woman con­firmed re­ceipt of the let­ter and said of­fi­cials would “con­tinue to work with stake­hold­ers through­out the process.”

The new law also re­quires that tax­ex­empt hos­pi­tals con­duct and re­port com­mu­nity health-needs as­sess­ments, but not un­til tax­able years start­ing in 2012. The dead­line to sub­mit com­ment to the IRS is Sept. 23. <<

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