Irs Report On Government Owned And Private Tax Exempt And Taxable Hospitals

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Polsinelli Update
March 2015
IRS Report to Congress Provides Little Insight on Government-Owned and Private Tax-Exempt and Taxable Hospitals.
The Internal Revenue Service (IRS) recently released its report to Congress on government-owned and private tax-exempt and taxable hospitals as mandated by Section 9007(e)(1) of the Affordable Care Act (ACA). The ACA requires the IRS to annually submit to Congress a report providing data with respect to private tax-exempt, taxable, and government-owned hospitals regarding (1) the levels of charity care provided; (2) bad debt expenses; (3) unreimbursed costs for services provided with respect to means-tested government programs; and (4) unreimbursed costs for services provided with respect to non-means-tested government programs. The ACA also requires the report to include information with respect to private tax-exempt hospitals regarding costs incurred for community benefit activities.
The report provides a good data compilation, but provides little insight into the meaning of the data. Although the report provides little analysis, tax-exempt hospitals have provided significant amounts of financial assistance and other community benefits. [What remains to be seen, however, is whether insurance expansions under the ACA thereby decreasing pool of uninsured patients will cause these numbers to decrease in the future. Tax-exempt hospitals could further struggle to justify tax-exempt status.]
Background on Financial Assistance and
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