The Internal Revenue Service announced that tax exempt organizations that operate one or more hospital facilities, and are required to file Form 990, are required to delay filing their 2010 tax forms until July 1, 2011 or later. In addition, hospital organizations with tax years ending from December 31, 2010, to February 28, 2011, will be granted an automatic three-month extension without needing to file for an extension. An additional three-month extension will also be available consistent with normal filing rules. This does not change the filing deadline for hospitals filing their 2009 Form 990 with an extended deadline before July 1, 2011.
This delay is necessary to allow the IRS to complete implementation of changes to IRS forms and systems required to reflect additional requirements for charitable hospitals enacted under the Affordable Care Act of 2010 (ACA). Section 501(r), added to the Code by the ACA, imposes four new requirements on 501(c)(3) organizations that operate one or more hospital. Each 501(c)(3) hospital is required to meet four general requirements on a facility-by-facility basis:
- Adopt and implement written financial assistance and emergency medical care policies,
- Limit charges for emergency or other medically necessary care,
- Comply with new billing and collection restrictions, and
- Conduct a community health needs assessment at least once every three years (effective for tax years beginning after March 23, 2012).
The 2010 Form 990 will provide hospital organizations with opportunities to describe the policies and activities of each hospital facility they operate and explain how each facility is complying with the new requirements. These questions will be optional for hospital organizations with tax years beginning on or before March 23, 2010 (date of enactment). They will be required for tax years beginning after this date. In addition, the 2010 Schedule H will have questions relating to community health needs assessments. These questions will be optional for all hospitals. All hospitals will be required to address these questions for tax years beginning after March 23, 2012.
Hospital organizations whose tax years began after March 23, 2010 will also be required to attach a copy of its most recent audited financial statements to the Schedule H. If a hospital is audited as part of a consolidated financial statement, the consolidated financial statement should be attached.
All hospitals exempt under 501(c)(3) should ensure they have the appropriate policies in place to meet the requirements of 501(r) and be prepared to explain how they are complying with the new rules. In addition, hospitals should begin to consider how they will conduct a community needs assessment prior to March 23, 2012.
If you have any questions related to either the delay in filing deadlines or the new rules under 501(r), please contact your Eide Bailly professional.
