IRS Releases Proposed Community Health Needs Assessment Guidance, Seeks Comment

The Internal Revenue Service has released proposed community health needs assessment guidance for tax-exempt hospitals and is seeking comment on the proposed criteria.

The Patient Protection and Affordable Care Act mandates tax-exempt hospitals perform a community health needs assessment every three years, effective March 23, 2012, or risk a $50,000 fine each taxable year. Hospitals must also, on their IRS Form 990s, report what they are doing to address the needs identified in the needs assessment, describe any needs not being addressed and explain why they are not being addressed.

The proposed guidance outlines which hospitals will be required to complete community health needs assessments and establishes standards for the assessment process and reporting.

Highlights of the proposed guidance include:

  • Hospital organizations with multiple facilities must conduct a community needs assessment and adopt an implementation strategy for each hospital.

    According to the proposed guidance, "Although hospital organizations will be able to collaborate with other organizations when conducting CHNAs and developing implementation strategies, Treasury and the IRS intend to require a hospital organization operating multiple hospital facilities to document separately the CHNA and the implementation strategy for each of its hospital facilities."

  • Hospitals can base their assessments on information collected by other organizations and will be allowed to collaborate with other organizations.

  • Hospitals must seek input for the assessment from the following. Additional input from community groups is accepted but the following represents the minimum.
    • Persons with special knowledge of or expertise in public health;
    • Federal, tribal, regional, State, or local health or other departments or agencies, with current data or other information relevant to the health needs of the community served by the hospital facility; and
    • Leaders, representatives, or members of medically underserved, lowincome, and minority populations, and populations with chronic disease needs, in the community served by the hospital facility.

  • Each community health needs assessment must be a written document and include the following elements:
    • A description of the community served by the hospital facility and how it was determined.
    • A description of the process and methods used for the assessment, including identities and qualifications of third-party collaborators.
    • A description of how the hospital organization took into account input from persons who represent the broad interests of the community served by the hospital facility.
    • A prioritized description of all of the community health needs identified as well as a description of the process and criteria used in prioritizing such health needs.
    • A description of the existing healthcare facilities and other resources within the community available to meet the community health needs identified through the CHNA.

  • The final assessment report must be made publicly available on the hospital facility's, or if the individual facility does not have its own website, hospital organization's, website. The website must include clear instructions for downloading the report; the report available must be a complete version; and any software needed to download the report must be free and widely available.

  • The hospital must also develop and report its implementation strategy to meet the needs identified in the assessment. The implementation strategy must:
    • Describe how the hospital facility will meet the health needs identified by the assessment. Hospitals may meet the needs through specific programs and resources or through collaboration with other organizations.
    • Identify any needs that will not be met by the facility and explains why it will not be met.

The IRS previously issued Notice 2010-39 proposing new requirements for tax-exempt hospitals as required by the PPACA; however, in response to requests by the American Hospital Association and others, the IRS has issued this proposed additional guidance on specific health needs assessment issues.

Comments on the proposed guidance are being accepted until Sept. 23.

Comments should be sent to the following address:

Internal Revenue Service
CC:PA:LPD:PR (Notice 2011-52), Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044

Read IRS Notice 2011-52.

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