Health Care Reform Legislation Imposes New Requirements on Tax-Exempt Hospitals


The Patient Protection and Affordable Care Act (the Act), signed into law last week, imposes four new requirements on non-profit hospitals in order to maintain their tax-exempt status. The new requirements apply to any organization that operates at least one facility required by a state to be licensed, registered or similarly recognized as a hospital, and any other organization the IRS determines has the provision of hospital care as the principal function or purpose for which it obtained tax-exempt status. For any taxexempt organization that owns and operates more than one hospital facility, each facility must meet the new requirements.

With the exception of the community health needs assessment detailed below, these requirements are generally effective for taxable years beginning after March 23, 2010. Therefore, hospitals must take action to adopt policies and procedures to meet these requirements before the beginning of their next taxable year.

The Act amends the Internal Revenue Code to specify that a hospital will not be treated as tax exempt unless it meets the following requirements...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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