Earlier this year, the Internal Revenue Service issued final regulations under Section 501(r) of the Internal Revenue Code, imposing specific requirements on tax-exempt hospital organizations. Section 501(r) addresses community health needs assessments, financial assistance and emergency care policies, limitations on charges, and billing and collection policies. Not-for-profit hospitals that fail to meet these new requirements could be at risk of losing their tax-exempt status.

Each 501(c)(3) hospital organization is required to meet four general requirements on a facility-by-facility basis:

Conduct a community health needs assessment (CHNA) and adopt an implementation strategy at least once every three years. (These CHNA requirements are effective for tax years beginning after March 23, 2012)

Establish written financial assistance and emergency medical care policies,

Limit amounts charged for emergency or other medically necessary care to individuals eligible for assistance under the hospital’s financial assistance policy,

Make reasonable efforts to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy before engaging in extraordinary collection actions against the individual, and

To preserve tax-exempt status and avoid certain excise taxes, 501(c)(3) hospitals must comply with the final regulations by the start of the tax year that begins on or after Dec. 29, 2015. For most hospitals, that means by 
Jan. 1 or July 1, 2016.

After the release of final regulations we were pleased that Availity Patient Access, which has been helping providers address the growing strain of consumerism, includes a feature that helps not-for-profit providers meet the requirements of the new regulation. Availity Patient Access not only stores an organization’s business rules and financial assistance policies, it helps ensure those policies are followed. Through automated workflow and customized scripting, our Patient Access solution helps ensure these policies are consistently, correctly and automatically applied to every patient encounter, thus greatly reducing the risk of losing your tax-exempt status. (Solution indicates when a patient may qualify and by using scripts guides the user through what steps should be taken. The Federal Poverty Guidelines (FPG) are built in the Patient Access system and are updated annually when published by HHS.)

Is your organization prepared? Join us for a 501 (r) webinar on October 29 as we take a closer look at how the regulations were changed to be more hospital-friendly as well as review compliance timing and some of the challenges associated with implementing new policies and procedures. Register for the webinar today!