IRS continues probe into nonprofit hospitals' charity care

A new report by the Internal Revenue Service (IRS) said the agency had conducted nearly 600 reviews of tax-exempt hospitals and the community benefits they provide through the end of April.

The IRS is expected to review 1,700 tax-exempt hospitals by the end of 2011, and had conducted 570 through April 30. That's approximately one-third of the nation's total non-profit facilities.

The reviews are part of an information-gathering process to determine whether non-profit hospitals are actually reporting their community benefits and other charitable activities. However, the report noted that "because of the limited scope nature of this review, we did not perform any testing to evaluate the effectiveness of this process."

The Patient Protection and Affordable Care Act requires that non-profit hospitals perform a variety of activities to preserve their tax exemptions, including the implementation of financial assistance programs for patients, limiting charges for emergency care, and conducting assessments of the health needs of their communities.

The IRS is also tasked with reviewing the community benefits provided by each hospital every three years.

For more:
- read the AHA News Now article
- read the IRS report (.pdf)