IRS Makes New ACA Reporting Requirements for Tax-Exempt Hospitals Optional for Tax Year 2010 - June 14, 2011

The Internal Revenue Service (IRS) recently clarified its approach to the way tax-exempt hospitals must report certain new requirements under the Affordable Care Act (ACA). Under Section 9007 of the ACA, tax-exempt hospitals must begin conducting community health needs assessments; developing financial assistance policies; restricting charges to uninsured, indigent patients; and publicizing billing and collections and charges information, as a precondition to maintaining tax-exempt status. Part V.B of Schedule H of IRS Form 990 (“Part V.B”) includes a series of questions relating to these new requirements. However, the IRS has stated that for tax year 2010, reporting of Part V.B is optional in order to provide hospitals with more time to become familiar with the type of information that the IRS will be collecting relating to these new ACA requirements. Although reporting of the new ACA Section 9007 requirements remains optional, tax-exempt hospitals are still required to meet the new standards; most new requirements must be met in tax years beginning after March 23, 2010, but hospitals still have until the tax year following March 23, 2012, to complete the first community health needs assessment.