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Not For Profit/Exempt Organizations Blog

New Proposed Regulations on Federal Income Tax Exemption for Hospitals

Posted in IRS Filings

As we have previously reported, the 2010 Health Care Reform Act imposed new, specific requirements for hospitals to maintain their Section 501(c)(3) tax-exempt status.  On June 22, 2012, the Treasury Department released proposed regulations interpreting and implementing certain of these requirements.  Specifically, the proposed regulations provide guidance on the following requirements of Section 501(r):  required financial assistance policies (including how they are to be made “widely available”); required emergency care policies; amounts that may be charged to patients eligible for financial assistance; and the requirement that hospitals make reasonable efforts to determine whether individuals are eligible for financial assistance before initiating extraordinary collection actions against such individuals.  The statutory requirements went into effect at the time of enactment but the proposed rules state that the rules specified in the regulations will be effective only when final regulations are published.  We will provide a summary of these proposed rules shortly.