The Patient Protection and Affordable Care Act (H.R. 3590), enacted on March 23, 2010, includes new requirements for nonprofit hospitals in order to maintain their Section 501(c)(3) tax-exempt status.  If a nonprofit hospital organization operates more than one hospital facility, each facility within the organization will also need to meet the new requirements. The hospital organization will not be treated as a Section 501(c)(3) organization with respect to any of its facilities that independently fail to meet the new requirements.

Nonprofit hospitals must comply with many of the new rules for tax years beginning after March 23, 2010.  This means, for example, that if a nonprofit hospital’s fiscal year is May 1 through April 30, the hospital organization – and each hospital facility – must be in compliance with the requirements no later than May 1, 2010.  Nonprofit hospitals have two additional years to comply with new requirements focusing on community health needs assessment and reporting, which take effect for tax years beginning after March 23, 2012.

We recommend that nonprofit healthcare providers take immediate action to identify areas of possible noncompliance.  To help nonprofit hospitals and hospital systems confirm that their facility or organization will be in compliance with the new rules, Waller Lansden has developed a checklist, available at our Healthcare Reform Resource Center at this link.
 
For additional information and healthcare reform analysis, please contact Donald B. Stuart or any member of Waller Lansden's Healthcare Department at 800-487-6380.
 






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The opinions expressed in this bulletin are intended for general guidance only.  They are not intended as recommendations for specific situations.  As always, readers should consult a qualified attorney for specific legal guidance.