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Hospital Tax-exempt Status

Provisions of the federal Affordable Care Act (ACA) place additional requirements on hospitals seeking to maintain federal tax exemption. In addition, a 2012 state Supreme Court decision has made Pennsylvania’s not-for-profit hospitals and health systems vulnerable to challenges to their exemption from state and local taxes.

In response to the court ruling, HAP continues to work with state lawmakers to uphold the tenets of Pennsylvania’s vanguard Institutions of Purely Public Charity Act (Act 55 of 1997) to reduce the likelihood of challenges to hospitals’ tax status.

Any Willing Insurer

HAP opposes Any Willing Insurer proposals, which would force hospitals to contract with any interested insurer as a requirement to obtain their tax-exempt status. This approach forces a one-size-fits-all system for how hospitals must contract with insurers and how they are paid for patient care. Any Willing Insurer would hinder contracts that promote innovative care models and hospitals' ability to address specific patient and community health care needs. HAP advocates for elective network contracting, which is a fundamental to the competitive process and the concept of managed care––adopted by the state and federal governments to control costs and improve care.

CapitolTaxExempt637057143793328484Community Health Needs Assessments

Under the ACA, not-for-profit hospitals are required to conduct Community Health Needs Assessments (CHNA) every three years. These assessments identify the main health needs and challenges facing the patients and communities that the hospital serves. Hospitals get this information through focus groups, interviews, surveys, analysis of health indicators, and data collection. They determine how to approach these health problems by developing, implementing, and evaluating improvement plans.

The ACA implements the community health needs assessment requirement through changes in the Internal Revenue Code. The Internal Revenue Service's Schedule H form and instructions address how not-for-profit hospitals report CHNA activities on their Form 990. Additionally, Schedule H, Part V, incorporates the requirements of the Internal Revenue Code Section 501(r) as contained in the ACA. 

Community Benefit Shadowing 

Hospitals are the anchors of their local communities—the economic engine, the community center, and the focal point of promoting health. One of the most compelling advocacy tools hospitals have is their story of healing, health, and hope. HAP developed a guide and sample model to assist hospitals with undertaking a community benefits shadowing project to show elected officials, local leaders, and the media what their hospital is doing beyond its campuses to improve health, wellness, and quality of life.

HAP Contacts

For more information, contact Warren Kampf, senior vice president, advocacy and external affairs; Laura Stevens Kent, senior vice president, strategic integration; Stephanie Watkins, vice president, state legislative advocacy; or Jolene Calla, vice president, health care finance & insurance. For media inquiries, contact Rachel Moore, director, media relations.

HAP News

January 22, 2020

Health Care Remains a Top Priority Among Americans

A recent Gallop poll of American adults indicates that health care remains a top-of-mind issue among Americans and will, once again, be a consideration in the upcoming Presidential election. Of the poll responses, 35 percent of adults ranked health care extremely important, and 81 percent ranked health care as either extremely important or very important.

January 17, 2020

HAP Calls for Certainty, Urges Supreme Court to Review ACA Case

In a “friend of the court” brief, HAP joined state hospital associations from around the country in urging the Supreme Court to provide “prompt and final resolution” of questions raised by the appeals court decision that held the Affordable Care Act’s (ACA) individual mandate unconstitutional.

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