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Health Care Practice

Matthew J. Murer
Practice Area Chair

Alan K. Parver
Practice Area Vice-Chair

Janice A. Anderson
Douglas K. Anning
Cynthia E. Berry
Mary Beth Blake
Sara V. Blass
Tina M. Boschert
Gerald W. Brenneman
Teresa A. Brooks
Jared O. Brooner
Sera Chong
Anne M. Cooper
Lauren P. DeSantis-Then
S. Jay Dobbs
Meredith A. Duncan
Fredric J. Entin
Jennifer L. Evans
Colleen M. Faddick
T. Jeffrey Fitzgerald
Kara M. Friedman
Rebecca L. Frigy
Randy S. Gerber
Jonathan K. Henderson
Jay M. Howard
Sara V. Iams
George Jackson, III
Bruce A. Johnson
Joan B. Killgore
Anne L. Kleindienst
Chad K. Knight
Jason T. Lundy
Patrick J. Martinez
Jane K. McCahill
Ann C. McCullough
Aileen T. Murphy
Gerald A. Niederman
Edward F. Novak
Thomas P. O'Donnell
Daniel S. Reinberg
Randal L. Schultz
Charles P. Sheets
Kathryn M. Stalmack
Leah Mendelsohn Stone
Chad C. Stout
Steven K. Stranne
William E. Swart
Emily C. Tremmel
Andrew B. Turk
Jennifer L. Weinfeld
Kimela R. West
Mark R. Woodbury

Additional Health Care

Julius W. Hobson, Jr.
Beverly A. Pheto
Harry Sporidis

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Health Care practice,
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Nonprofit Organizations Practice

Thomas J. Schenkelberg
Practice Area Chair

Douglas K. Anning
Practice Area Vice-Chair

John S. Black
Scot W. Boulton
Michael V. Conger
John F. Crawford
Geoffrey D. Fasel
Jeffrey E. Fine
Virginia C. Gross
Bruce R. Hopkins
Quentin L. Jennings
D. Scott Lindstrom
Lisa D. McLaughlin
Anthony J. Romano
Lisa M. Schultes
David N. Zimmerman

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about our Nonprofit Organizations
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August 2011


IRS Issues Notice on Community Health Needs Assessment Requirements

A Polsinelli Shughart Update


On July 7, the IRS issued guidance on the community health needs assessment (CHNA) requirements imposed on tax-exempt hospital organizations (IRC § 501(r)(3)), and related excise tax and reporting obligations (Notice 2011-52). This guidance states: “Treasury and the IRS intend to require a hospital organization to conduct a CHNA and adopt an implementation strategy for each hospital it operates.” Hospitals may rely on this guidance until regulations are promulgated. Public comment is sought on this guidance and must be submitted by September 23, 2011.

What You Need To Know

  • For now, only organizations operating state-licensed hospital facilities will be considered hospital organizations for this purpose
  • Within this definition are charitable organizations that operate these facilities through a disregarded entity, limited liability company, partnership, or other joint venture
  • The CHNA must be documented in a written report that includes a description of the community served, a description of the process used to conduct the assessment, and a description of how input from persons representing the community’s interests was taken into account
  • Hospital organizations must address each community health need in an implementation strategy
  • A CHNA may be based on information collected by other organizations, such as a public health agency or a nonprofit organization
  • A hospital may make its CHNA widely available to the public by means of a website (pursuant to rules similar to the exempt organizations’ general document disclosure rules)
  • An implementation strategy, which may be developed in collaboration with other organizations and must be approved by a governing body, must be attached to the hospital organization’s Form 990
  • The $50,000 excise tax imposed for failure to satisfy the CHNA requirements (IRC § 4959) will be imposed separately with respect to each hospital facility
  • A hospital organization must conduct a CHNA and adopt an implementation strategy for each of its hospital facilities by the last day of its first tax year beginning after March 23, 2012.

What You Need To Do Now

You should determine if the new CHNA requirements are applicable to your organization. The requirements under the law and this guidance can be burdensome on an organization. One significant burden is the requirement that a hospital organization address each community need in an implementation strategy. Accordingly, your organization may wish to start the process of conducting CHNAs and developing implementation strategies in advance of the effective date. In addition, you should determine if it makes sense for your organization to submit comments to the IRS relative to this new guidance.

For More Information

If you have questions regarding CHNA, please contact:


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