On December 29th, the IRS released final regulations regarding Internal Revenue Code Section 501(r). Section 501(r) was added to the Code as part of the Accountable Care Act and imposes certain requirements on charitable hospitals. In general, the final regulations provide guidance on hospital obligations under Section 501(r), define the types of entities that must comply with these obligations, and describe the consequences for failing to meet Section 501(r)’s requirements.
More specifically, the final regulations include provisions addressing the following:
- A definition of what constitutes a “hospital organization” and “hospital facility” under Section 501(r);
- Guidance relating to minor errors and omissions under Section 501(r)’s disclosure requirements;
- Provisions regarding the preparation and documentation of Community Health Needs Assessments (“CHNAs”);
- Guidance regarding development of a Financial Assistance Policy (“FAP”), including eligibility criteria, publicizing the FAP, and development of emergency care policies;
- Limitations on charges to FAP eligible individuals; and
- Limitations on billing and collection activities relating to FAP eligible individuals.
The final regulations relating to Section 501(r) will be applicable to hospital facilities for the taxable year beginning after December 29, 2015. A copy of the final regulations may be found here.