The Affordable Care Act not only protects patients from hidden and high prices and unreasonable collections actions – it also requires charitable hospitals to take an active role in improving the health of the communities they serve. Today, the Department of the Treasury took the next step in refining new policies already in place that hold charitable hospitals to a higher standard when it comes to addressing the health needs in their communities. The proposed rules issued today add details on how hospitals should conduct community health needs assessments and define how the IRS will enforce any violations of the new standards.
The health care law requires charitable (tax-exempt) hospitals to:
Charitable hospitals are more than half of the nation’s hospitals. These hospitals receive many benefits, including tax-free earnings and receipt of tax-deductible contributions, so it’s only right that they provide a benefit to their communities.
Key protections – specifically, limitations on billing and collections actions and the financial assistance policy requirements – went into effect for tax years starting after March 23, 2010, while other provisions, such as community health needs assessment, went into effect for tax years beginning after March 23, 2012. The proposed rules issued today, which with others are expected to be finalized this year, refine the policies that are already in effect. Hospitals may rely on today’s proposed rules and other interim guidance issued by the Treasury Department as they comply with the new requirements of the health care law.