Section 501(r) requirements

Section 501(r) requirements

The passage of the Affordable Care Act resulted in changes to the Internal Revenue Code, creating Section 501 (r). In addressing financial issues, tax exempt hospital organizations are required to:

  • Establish written financial assistance and emergency medical care policies.
  • Limit the amounts charged for emergency or other medically necessary care to individuals eligible for assistance under the hospital’s financial assistance policy (FAP).
  • Make reasonable efforts to determine an individual’s eligibility for assistance under the hospital’s financial assistance policy before engaging in extraordinary collection actions against the individual.

While the ACA proposed financial regulations are currently in effect, final regulations have not yet been issued by the IRS. A link to the IRS Requirements Related to Financial Assistance and Emergency Medical Care and the proposed regulations can be found here:
http://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/New-Requirements-for-501%28c%29%283%29-Hospitals-Under-the-Affordable-Care-Act

The Office of the Treasury’s 2014–2015 Priority Guidance Plan lists the completion of the final regulations under §§501(r) and 6033 on additional requirements for charitable hospitals as added by §9007 of the ACA as a priority during the period from July 2014 through June 2015. While not guaranteed, It is widely assumed the final regulations will be released in this fiscal year.

For an excellent resource review Preparing for Section 501(r) by Keith Hearle.

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