Healthcare 501(r) Services

Meeting the Multidimensional Requirements of Section 501(r)

Another layer of tax compliance has been added to the agenda of not-for-profit hospitals: meeting the requirements of IRC Section 501(r). Not-for-profit health systems and hospitals are now subject, under the Affordable Care Act, to significant compliance initiatives to maintain tax-exempt status.

Not-for-profit organizations must comply with the statutory and regulatory requirements of Section 501(r) as follows:

  • Perform a community health needs assessment every three years.
  • Establish written policies on financial assistance and emergency medical care.
  • Limit amounts charged for emergency or other medically necessary care provided to patients who qualify under the hospital’s financial assistance policy.
  • Make reasonable efforts to determine patients’ eligibility for financial assistance before engaging in extraordinary collection actions.

Achieving compliance with Section 501(r) requires the involvement of many hospital departments. Finance, tax, revenue cycle, patient accounting, community benefit services, and legal departments all must be involved for successful planning, implementation, and operational compliance with these rules.

It may seem daunting to be charged with implementation of the 501(r) regulations. Crowe Horwath LLP can help – our experienced, not-for-profit healthcare tax professionals understand that no hospital system is alike and seek to understand and assess specific compliance needs by applying a hands-on, multidisciplinary approach. Our professionals will work with you to coordinate efforts across multiple departments by using various customized solutions to encourage stakeholders across the hospital system to work efficiently and effectively together to achieve 501(r) compliance.