The Affordable Care Act (ACA) establishes, for the first time, specific statutory requirements that hospitals must meet in order to qualify as a 501(c)(3) tax-exempt organization under the Internal Revenue Code. The new requirements are included in section 501(r) of the Internal Revenue Code, which outlines the additional requirements that an organization must satisfy in order to retain their 501(c)(3) tax-exempt status.
Tax-exempt organizations would be required to:
Conduct a community health needs assessment every three years and adopt an implementation strategy to meet the community health needs identified.
Establish a financial assistance policy and an emergency medical care policy.
Limit charges for emergency or other medically necessary care provided to individuals eligible for assistance under the hospital’s financial assistance policy.
Forego extraordinary collection efforts against an individual before the hospital has made reasonable efforts to determine if the individual is eligible for assistance under the hospital’s financial assistance policy.
Include audited financial statements or the consolidated financial statements with its Form 990.
Of importance, is the fact that these requirements must be met by each hospital facility within the organization. The organization will not be treated as a section 501(c)(3) tax-exempt organization with respect to the facility that does not meet these requirements.
