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.

HAP continues to monitor the impact of the court ruling on not-for-profit hospitals and will 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.

 

Capitol BuildingCommunity 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. 

HAP Contacts

For more information, contact Heather Tyler, vice president, state legislative advocacy, or Jolene Calla, Esq., vice president, finance & legal affairs. Media inquiries should be directed to Chris Daley, vice president, strategic communications.

 


HAP News


June 14, 2024

Achievement Awards Spotlight: Nazareth Hospital

HAP's annual Achievement Awards honor hospitals and health systems for their innovation, creativity, and commitment to patient care. The Achievement Awards showcase and share member hospitals’ and health systems’ successful programs and best practices.

June 12, 2024

Pa. Lawmakers Consider Several Key Health Bills

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