Health Law

HEALTH CARE REFORM BILL (IV) : NEW REQUIREMENTS FOR NOT FOR PROFIT HOSPITALS TO MAINTAIN TAX EXEMPTION.

By Greg Piche'

    As part of the Patient Protection and Affordable Care Act (?PPACA?) not for profit hospitals must satisfy four new requirements to maintain their tax exemptions. They must:

• Conduct a community health needs assessment once every three years.
• Adopt a policy for financial assistance.
• Limit charges for those qualifying for financial assistance  and 
• Refrain from taking extraordinary collection actions before undertaking reasonable efforts to determine whether a patient qualifies for financial assistance.

Tax exempt hospitals are required to include and disclose additional information on Form 990(H) regarding community needs assessment implementation and financial audits. The IRS is required to review every tax exempt hospital?s community benefit activities at least once every three years. The treasury secretary will report to Congress on the comparative levels of hospital charity care to be part of a Congressional study on emerging trends.

    The needs assessment must take into account input from persons who represent the broad interests of the community served by the hospital facility including those with special knowledge or expertise in public health. Non compliance results in an excise tax penalty of up to $50,000.00.

    The financial assistance policy must include:

• eligibility criteria for assistance, and whether it includes free or discounted care;
• the basis for calculating the amounts charged to patients;
• the methods for applying for financial assistance;
• identification of the collection actions that will be taken in the event of non-payment;
• measures to widely publicize the  policy within the hospital community.

    Non-profit hospitals will also have to adopt a written Emergency Medical Care policy requiring them to provide, without discrimination care for emergency medical conditions, within the meaning of EMTALA to individuals regardless of their eligibility under the organizations financial assistance policy. They are also required to limit charges for emergency or other medically necessary care provided to persons who qualify for financial assistance to the  amounts ?generally billed? to individuals with insurance. ?Generally billed? may be based on Medicare rates or an average of the best three negotiated commercial rates.

Full post as published by Healthcare Law Blog on April 30, 2010 (boomark / email).