The Internal Revenue Service intends to allow a window for reparations for tax-exempt hospitals that fail to live up to new standards under the healthcare reform law.
On Wednesday afternoon, the IRS issued a 97-page proposed rule carrying out new requirements for not-for-profit hospitals to conduct and submit community health needs assessments (PDF).
The American Hospital Association and the Healthcare Financial Management Association lobbied heavily to persuade the IRS that its earlier guidance would have buried hospitals in duplicate reporting requirements and may have penalized them for minor infractions and omissions, ultimately discouraging transparency.
Under the Patient Protection and Affordable Care Act, hospitals can incur a $50,000 excise tax for failing to deliver an adequate community health needs assessment.
According to the proposed rule, the IRS won't construe minor omissions and errors as failures to meet the requirements. Problems that are “neither willful nor egregious” will be excused if they're promptly disclosed and corrected.
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