IRS Revenue Procedure 97-13 limits the “private business use” of facilities financed with tax-exempt state or local bonds, such as hospitals participating in PPACA programs.
The AHA suggested the IRS issue new guidance to recognize that many PPACA programs, such as accountable care organizations, are not designed to maximize net profits, “but rather involve incentives designed to improve the quality and efficiency of care,” according to the letter. Therefore, when it comes to PPACA programs, the AHA argued the IRS should not hold hospitals and other facilities financed through tax-exempt bonds to that limit.
More Articles on Hospitals and the IRS:
AHA to IRS: Update Tax-Exempt Bond Rules for Healthcare Reform
IRS to Hold Hearing on Proposed Tax-Exempt Regulations for Hospitals
Hospital Groups Urge Government to Ease Tax-Exempt Regulations
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