The Law of Tax‐Exempt Healthcare Organizations

What Challenges Do Nonprofit Hospitals Face in Taking on Community Health Needs Assessments? A Qualitative Study From Appalachian Ohio

“…Somewhat paradoxically, it appears that those aspects of CHNA requirements about which interviewees expressed confusion appear to have been written to allow interpretative latitude . This makes sense considering the well‐documented tradition in IRS code of referring to “flexibility” in designing community benefit . This flexibility is especially noticeable in areas such as how hospitals define “community,” in how they conceptualize and undertake implementation plans, the types of data collection used, and the extent to which community members are to be involved in carrying out CHNAs and post‐CHNA programming.…”

“…43 This makes sense considering the well-documented tradition in IRS code of referring to "flexibility" in designing community benefit. 44,45 This flexibility is especially noticeable in areas such as how hospitals define "community," in how they conceptualize and undertake implementation plans, the types of data collection used, and the extent to which community members are to be involved in carrying out CHNAs and post-CHNA programming. One of the most promising effects of new CHNA requirements is encouragement for hospitals to collaborate on reports and share resources when studying overlapping populations.…”

The Impact of IRS Tax Policy on Hospital Community Benefit Activities

“…For example, in 1956, the IRS instituted the “financial ability” and “charity care” standards for ascertaining whether a hospital was worthy of not-for-profit status and tax exemption, essentially requiring that they provide some level of uncompensated, “charity” care (Revenue Ruling 56-185). However, in 1969, given the newly established Medicaid and Medicare programs and the fact that tax-exempt, not-for-profit hospitals were being paid through these government programs, the IRS replaced the charity care standard with the “community benefit” standard ( Revenue Ruling 69-545; Hyatt & Hopkins, 2013). This change meant that tax-exempt, not-for-profit hospitals were expected to provide benefits to their communities.…”