IRS Issues Second Draft of Schedule H Tax Form, Seeks Additional Comments

The Internal Revenue Service has issued a second Schedule H draft form for hospitals, which will go into effect next tax year, and it is also accepting comments on the proposed changes.

The American Hospital Association, Healthcare Financial Management Association and VHA provided recommendations in August to the IRS for several changes within the Schedule H draft. The second draft incorporated some of the groups' initial comments, including the following:

•    Eliminating ranking information of facilities measured by total revenue per facility in Part V, Section A, Hospital Facilities.
•    Adding the line "before making reasonable efforts" when determining if the patient was eligible under the facility's financial assistance policy in Part V, Section B, Billing and Collections.

However, the IRS did not make some of the groups' suggested changes, which they have argued would "reduce the burden on hospital systems or eliminate numerous redundancies in the form." Changes that were not made include the following:

•    The draft form keeps the provision in Part V, Section B that hospitals must complete a separate Section B for each of the hospital facilities they listed in Part V, Section A. The groups recommended that hospitals only complete one Part V, Section B if each of the facilities in Section A has the same answers.
•    The draft form did not remove the questions (lines 6a and 6b) regarding a community benefit report in Part I.
•    The draft form did not change the wording in Part III, line 9a from "debt collection policy" to "billing and collections policy."
•    The draft form did not delete Part V, Section B, line 20, which the groups argued was redundant to line 13 within the same section.

Related Articles on Hospital Taxes:

23 Hospitals Issued Tax-Exempt, Fixed-Rate Bonds in Last 30 Days
Report Examines IRS' Implementation of New Requirements for Tax-Exempt Hospitals Under Health Reform
Illinois Gov. Pat Quinn Holds State Decisions on Hospital Tax-Exemptions

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