In This Issue:

- Community Health Needs Assessments (Code Section 501(r)(3))

- Financial Assistance Policies (Code Section 501(r)(4))

- Limitation on Charges (Code Section 501(r)(5))

- Billing and Collection Policies (Code Section 501(r)(6))

- Miscellaneous Provisions Relating to Section 501(r)

- Conclusion

- Excerpt from Community Health Needs Assessments (Code Section 501(r)(3)):

On December 31, 2014, the U.S. Department of the Treasury and the Internal Revenue Service (collectively, IRS) released 64 pages of regulations1 (Final Regulations) finalizing a number of requirements with which charitable hospitals must comply in order to avoid significant fines or the loss of their tax-exempt status. Despite their length, the Final Regulations do not contain any dramatic surprises (positive or negative) or onerous new requirements compared to the various proposed rules under Section 501(r) issued over the past few years.

Instead, the Final Regulations contain dozens of small changes to the previously issued proposed rules that will become mandatory for compliance with Section 501(r) of the Internal Revenue Code for tax years beginning after December 29, 2015. The multitude of various requirements will make for important (but tedious) reviews of existing financial assistance and billing and collection policies to ensure full compliance with the Section 501(r) and the new regulations. For those hospitals that previously drafted financial assistance and collection and billing policies to satisfy the requirements set forth in the proposed rules, numerous small revisions will still be required to such policies. For those hospitals that did not revise their policies to rely on the proposed rules, the ability to rely solely on the statute for reasonable interpretations of Section 501(r) for tax years beginning after December 29, 2015, will be gone, and significant revisions to their existing policies will be required.