IRS revokes first hospital’s nonprofit status for not meeting Obamacare requirements

For the first time, the Internal Revenue Service has revoked an unidentified hospital's nonprofit status for failure to meet requirements of the Affordable Care Act.

Several industry publications reported that the requirements went into effect last fall, and the IRS recently finished its first round of checks.

Becker's Hospital Review reported that the IRS said an agent met with the hospital's CEO, CFO and COO and that they made it clear the organization "had neither the will, the financial resources, nor the staff to follow through" with the requirement.

"The increased scrutiny is specific to 501(r) mandates included in the Affordable Care Act, which require hospitals to formulate clear written financial assistance policies for patients and make reasonable efforts to determine whether patients are eligible for assistance prior to taking any collection actions," FierceHealthcare.com reported. "The IRS is supposed to review each hospital every three years."

The requirements also involve conducting Community Health Needs Assessments.

Healthcare Financial Management Association reported that Keith Hearle, president of Virginia-based Verité Healthcare Consulting LLC said he has heard of several other hospitals that incurred a $50,000 excise tax for failing to meet the part of the requirement.

The IRS has not published a list of hospitals that met the requirements. However, LNP records show that those in Lancaster County have conducted community health needs assessments and adjusted their financial assistance policies in response to the law.

Credit: HEATHER STAUFFER | Staff Writer