IRS outlines how tax-exempt hospitals will meet new regs

The Internal Revenue Service issued 94 pages of proposed regulations Friday afternoon outlining proposals for how to implement new requirements for taxexempt hospitals in the Patient Protection and Affordable Care Act. The reform law created a new section of IRS rules known as 501(r), under which hospitals must meet four new requirements in order to retain or earn tax-exempt status. Not-for-profit hospitals must now publicly post their financial assistance policies for patients, including eligibility criteria and the basis for charged amounts. The hospitals must also limit charges to patients who qualify for the assistance policy to “not more than the amounts generally billed to individuals who have insurance covering such care,” and to take efforts to ensure that patients don’t qualify for the financial assistance policy before engaging in “extraordinary collection actions.” Hospitals must accept financial assistance applications for 240 days following the first billing statement. The new, proposed regulations specifically define exactly how hospitals should determine how much to charge financial-assistance patients, and exactly how they must publicize their assistance plans, among other clarifications. Public input is sought on the proposals for 60 days following publication in the Federal Register. The reform law also requires not-for-profit hospitals to conduct community health-needs assessments every three years showing that their charitable activities are benefitting specific local needs, but the IRS intends to release proposed rules to implement that requirement on a future date.