As part of several new requirements of the Patient Protection and Affordable Care Act signed into law on March 30, 2010, tax-exempt hospitals will be required to conduct a Community Health Needs Assessment every three years, effective for taxable years beginning after March 23, 2012. An overview of all the new requirements under the Affordable Care Act for tax-exempt hospitals can be found on the Internal Revenue Service’s (IRS) Web site.
In July, the IRS distributed a notice requesting comments on regulatory provisions it anticipates proposing for CHNAs required for tax-exempt hospitals. MHA, on behalf of Maryland's hospitals, responded to the IRS' request via letter prior to the September 23 deadline.
The U.S. Department of the Treasury and the IRS published a notice regarding the CHNA requirements in July 2011 because they understand that some hospital organizations may choose to start the process of conducting CHNAs and developing implementation strategies in advance of the effective date. According to the notice, hospitals may rely on the anticipated regulatory provisions described in the notice and any implementation strategy adopted, on or before the date that is six months after the date further guidance regarding CHNA requirements is issued.
Below is an overview of some of the specific provisions related to the CHNA requirements that the U.S. Department of the Treasury and the IRS anticipate will be included in the regulations as described in the notice released for comment in July 2011. MHA encourages all hospitals to read this notice thoroughly to obtain a comprehensive understanding of the anticipated CHNA requirements.
Overview of anticipated hospital CHNA requirements:
- Conduct a CHNA that meets the requirements of 501 (r)(3)(B) (see further details below) in such taxable year or in either of the two taxable years immediately preceding the taxable year
- Section 501(r)(3)(B) Requirements
- CHNA 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 of or expertise in public health
- CHNA must be made widely available to the public
- Adopt an implementation strategy to meet community health needs identified through the CHNA
- On Form 990 hospitals must provide a description of how the organization is addressing the needs identified in each CHNA and a description of any needs that are not being addressed and why they aren’t being addressed
- If a hospital organization operates more than one hospital facility, the organization is required to meet all of the section 501(r)(1) requirements, including the CHNA requirements, separately with each hospital facility
Penalty for not meeting CHNA requirements
- A $50,000 excise tax will be imposed on hospitals that fails to meet the CHNA requirements for any taxable year