On April 5, the IRS published proposed regulations regarding Section 501(r)(3) and the related reporting requirements of Section 6033 (the Proposed Regulations). The Proposed Regulations provide updated guidance on the community health needs assessment (CHNA) requirements applicable to hospital organizations described in Section 501(c)(3). The Proposed Regulations also address the consequences of a hospital organization's failure to comply with the requirements imposed by Section 501(r), which is the subject of a separate Polsinelli Update [click here].
What You Need to Know
Section 501(r)(3) requires Section 501(c)(3) organizations that operate hospital facilities to conduct a separate CHNA for each facility at least once every three years. The deadline for a hospital facility to conduct its first CHNA is the end of its first taxable year beginning after March 23, 2012. Hospitals with a June 30th fiscal year end must conduct their first CHNA no later than June 30, 2013.
The IRS previously provided guidance in Notice 2011-52 (the Notice) issued in July 2011 that addressed various aspects of conducting and implementing a CHNA. In June 2012, the IRS issued proposed regulations relating to other new hospital requirements under Section 501(r), which include definitions of key terms and concepts that apply to Section 501(r) generally, including the CHNA requirements of Section 501(r)(3).
The Proposed Regulations generally are consistent with the guidance set forth in the Notice and the 2012 proposed regulations, but provide additional guidance, clarity and transition rules. A hospital organization may continue to rely on the Notice for any CHNA made widely available to the public and any implementation strategy adopted on or before October 5, 2013. A hospital facility may rely on the CHNA requirement portions of the Proposed Regulations for any CHNA conducted or implementation strategy adopted on or before the date that is six months after the Proposed Regulations are published in final form.
What You Need to Do Now
Hospital organizations should carefully review their CHNA and implementation processes in light of the Proposed Regulations. For CHNAs conducted and implementation strategies adopted before October 5, 2013, a hospital organization may rely on the Notice; otherwise, the organization should look to the guidance provided in the Proposed Regulations.
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For More Information
If you have questions about this E-Alert and its subject matter, please contact any member of Polsinelli's Nonprofit Organizations practice group or: