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IRS Proposes Rule on Community Health Needs Assessments



This week in Washington—IRS issues proposed rule on community health needs assessments. You are tuning in to the National Association of Public Hospitals and Health Systems health policy update for the week of April 8, 2013.

The Internal Revenue Service proposed a rule April 3 that would require charitable hospitals to conduct triennial community health needs assessments and implement strategies to meet health needs. The community health needs assessment report must describe the health needs of the community the hospital serves. The proposed rule, which would apply to tax years beginning March 23, 2012, would allow hospitals to define their own communities and account for geography, populations served and the hospital’s special medical focus. Each assessment would have to include comments from previous reports and input from public health departments and low-income, minority, and underserved patient populations.

The proposed rule also details the consequences of noncompliance with the needs assessment requirement, including a $50,000 excise tax on a hospital that fails to conduct an assessment in any 3-year period. The rule also would allow the IRS to revise a hospital’s tax-exempt status after considering all facts and circumstances. For multifacility organizations, the regulation would impose the tax only on the noncompliant facility.

The proposed rule was published in the April 5 Federal Register and comments will be accepted until July 5.

Thanks for listening to another edition of This Week in Washington. I’m Zina Gontscharow; join us next week for another update.



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