Tax-exempt hospitals will face significant challenges in 2013 as they will be required to come into full compliance with Code Section 501(r), as added by the Affordable Care Act. More specifically, by year end, every hospital facility operated by a Code Section 501(c)(3) hospital organization must complete a community health needs assessment (“CHNA”) and adopt a corresponding implementation strategy. For hospital organizations whose fiscal year begins July 1, the June 30 deadline for completing these tasks is now less than six months away. Calendar year organizations have a bit more breathing room, but given the broad scope of the CHNA requirement, even their December 31 deadline might feel a bit too close for comfort.
Many hospitals are well on their way to completing the CHNA process, while others are still getting started. For all, the best source for official guidance is Notice 2011-52, through which the IRS addressed many important issues pertaining to the CHNA. This Notice identifies the elements that must be present in the document, the specific types of people whose input must be taken into account and how a hospital must make the information widely available to the public. Also informative is Schedule H to the Form 990, which contains several questions about CHNAs – including one that lists a number of categories that warrant consideration for inclusion in the final document. (For more information, please see Hall Render’s previous articles on Notice 2011-52 and the 2011 Form 990.)
For hospital organizations that are still in the early stages of this process, the most critical element is a strong plan that informs and involves the appropriate people, fully utilizes existing hospital resources and ensures that all requirements will be satisfied. For hospital organizations that are further along in developing their CHNAs, now is a good time for hospital leadership to review the progress that has been made, to provide an update to the board of directors, to ensure that the initial plan is being followed and is generating the needed information and to make any necessary “course corrections” to ensure a satisfactory and compliant end product. Finally, in advance of the applicable compliance deadline, all hospital organizations should plan accordingly to obtain the appropriate approval from their boards of directors (or an authorized committee) of the hospital organization’s implementation strategy for addressing the community health needs that are identified in their completed assessment.
Hall Render will continue to provide additional written guidance about this important topic over the months ahead. For additional information, please contact Jeffrey L. Carmichael at (317) 977-1443 or jcarmichael@hallrender.com.
