IRS Issues Proposed Rule on Hospital Community Health Needs Assessment - July 12, 2011

The Internal Revenue Service (IRS) on July 7 issued notice 2011-52, which proposes specific rules for hospitals to follow in conducting community health needs assessments (CHNAs) as required under the Affordable Care Act (ACA). Section 9007(a) of the ACA establishes new requirements for 501(c)(3) tax-exempt hospitals to follow, including conducting a CHNA every three years. Most significantly, the IRS has stated each hospital within a hospital system must conduct its own CHNA; the system could be subject to a $50,000 fine for each hospital that fails to conduct a test. However, hospitals may collaborate on developing reports and collecting the information that goes into them. Comments on the proposed rule are due to the IRS by Sept. 23, 2011.