Question of the Week

Question:  Has the Internal Revenue Service (“IRS”) issued proposed regulations on the requirement that charitable hospitals perform a community health needs assessment?

Answer:  Yes.  Internal Revenue Code Section 501(r)(3) requires that charitable hospitals perform a community health needs assessment (“CHNA”) every three years or risk losing tax-exempt status.  The IRS has issued proposed regulations on the CHNA requirements and set forth the consequences of failing to meet the requirements.

The proposed regulations state that a hospital meets the CHNA requirements if it has conducted a CHNA within the current tax year or in either of the two immediately preceding tax years and the board has adopted an implementation strategy to meet the community health needs identified through the CHNA by the end of the tax year in which the hospital conducts the CHNA.

Please note that these are proposed regulations, and that the final regulations may differ.  However, a hospital can rely on the proposed regulations for any CHNA performed or implementation strategy adopted up to six months after the proposed regulations are published as final or temporary regulations in the Federal Register.

Also, please note that the IRS is accepting comments on the proposed regulations that are received by July 5, 2013.