July 9, 2012
IRS Issues Proposed Regulations Implementing 501(r)
Part of the health care overhaul passed by Congress included a new subsection of Section 501, 501(r), that added new requirements for tax-exemption of nonprofit hospitals. These new requirements are mostly what I would call procedural in nature: requiring a health needs assessment and written charity care policies, as well as regulating the billing of indigent patients and debt collection actions. The legislation left most of the implementing details to the IRS. In July, 2011, the IRS issued Notice 2011-52, providing guidance with respect to the health needs assessment requirement. The IRS now has released proposed regulations addressing the remaining three areas (written charity care policies, billing, and debt collection). The agency is seeking public comment on the proposed regulations by September 24, 2012.
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