Hospital Charity Care — Effects of New Community-Benefit Requirements

U.S. nonprofit hospitals must now have written policies regarding charity care, charge reasonable amounts for it, refrain from extraordinary bill-collection practices, and assess community health needs every 3 years. The effects on charity care are likely to be mixed. The Internal Revenue Service (IRS) recently finalized new requirements for nonprofit hospitals to maintain their tax-exempt status under the Affordable Care Act (ACA). 1 Section 501(r) of the Internal Revenue Code now requires each hospital to establish a written financial-assistance policy that applies to all “emergency and medically necessary care.” Through these policies, hospitals must strive to ensure that patients who qualify for fully or partially subsidized charity care can apply for and receive it, are charged reasonable amounts, and are not subject to extraordinary bill-collection practices when they have outstanding medical debt. Hospitals are also required to assess the health . . .