The tax-exempt status of non-profit hospitals remains an area of focused debate among federal, state, and local policymakers. The Affordable Care Act (ACA) attempted to introduce greater transparency as to the charitable work provided by a tax-exempt non-profit hospital by requiring these entities to submit new information to the Internal Revenue Service (IRS). The ACA and subsequent IRS regulations require non-profit hospitals, in addition to the general requirements for tax exemption under Section 501(C)(3) and Revenue Ruling 69-545, to meet the following requirements:
- Conduct a Community Health Needs Assessment and commit resources to providing community benefits.
- Apply a Financial Assistance Policy (FAP) to all emergency and other medically necessary care provided.
- Adhere to the defined limitation on charges billed to patients covered by a FAP.
- Adhere to billing and collection practices that are considered extraordinary collection actions (ECAs) against a FAP eligible individual.
Prior to the enactment of the ACA tax-exempt hospitals demonstrated their charitable work to the community largely by reporting the monetary value of discounted and free care provided during a year. While this was not a full reflection of the hospital’s role in the community it did provide a clear, quantifiable datapoint. While the aim of the ACA may have been true, the IRS has failed to provide guidance that effectively and accurately reflects the qualitative impact of “community benefit” provided by a hospital.
URAC is seeking organizations who wish to serve on a Community Benefit Advisory Panel. As an independent accreditor, URAC will convene interested stakeholders to develop a program with clear standards and evidence of performance. This program will serve as framework to help these organizations preserve their tax-exempt status. At a minimum the framework would include:
- Evidence-based needs assessment and prioritization
- Make evidence-based community health investments
- Evaluate and measure progress
- Improve quality, transparency and community engagement.
These principles can help guide implementation of the Affordable Care Act’s community health needs assessment provisions by offering a straight-forward, feasible approach that hospitals and communities can use to pursue their mutual goal of community health improvement.
Please contact Robin Adams, Vice President of Product Development at or 202.962.8835 by April 30, 2019 if you wish to participate.
Founded in 1990, URAC is the independent leader in promoting healthcare quality through leadership, accreditation, measurement and innovation. URAC is a nonprofit organization using evidence-based measures and developing standards through inclusive engagement with a range of stakeholders committed to improving the quality of healthcare. Our portfolio of accreditation and certification programs span the healthcare industry, addressing healthcare management, healthcare operations, health plans, pharmacies, telehealth providers, physician practices, and more. URAC accreditation is a symbol of excellence for organizations to showcase their validated commitment to quality and accountability. For more information, visit .