On July 7, 2011, the Internal Revenue Service (IRS) released Notice 2011-52 (the Notice), a 28-page document that provides guidance to tax-exempt hospital organizations regarding Internal Revenue Code Section 501(r)(3)’s community health needs assessment (CHNA) requirements.  The Notice describes specific provisions related to the CHNA requirements that the Treasury Department (Treasury) and the IRS anticipate will be included in regulations to be proposed under Section 501(r).  The Notice also solicits comments on these provisions.  Comments must be submitted by September 23, 2011.

Section 501(r)(3) was added to the Internal Revenue Code by the Patient Protection and Affordable Care Act (PPACA).  Among other requirements, Section 501(r)(3) requires tax-exempt hospital organizations to conduct a CHNA every three years and adopt implementation strategies to meet the needs identified in the CHNA.  If a hospital organization operates more than one hospital facility, it must satisfy the CHNA requirements separately with respect to each.  Hospital organizations may be subject to a $50,000 excise tax per hospital facility for each year in which it fails to satisfy the CHNA requirements with respect to that facility.

Although the CHNA requirements are not effective until taxable years beginning after March 23, 2012, Treasury and the IRS published the Notice in advance of the proposed regulations in order to provide guidance to hospital organizations that choose to begin the process of conducting CHNAs and developing implementation strategies in advance of the effective date.  A hospital organization may rely on the anticipated regulatory provisions described in the Notice with respect to any CHNA the hospital organization makes widely available to the public and any implementation strategy adopted by the hospital organization on or before the date that is six months after the date further guidance regarding the CHNA requirements is issued.

The Notice contains information relating to many specific aspects of Section 501(r)(3)’s CHNA requirements, including discussions of the following topics:  information that must be included in each written report documenting a CHNA, the requirement that a CHNA “take into account input from persons who represent the broad interests of the community served by the hospital facility,” how a CHNA may “be made widely available to the public” as required by the law, adoption of an implementation strategy to meet the community health needs identified through the CHNA, and reporting requirements related to CHNAs.  

IRS Notice 2011-52 is available by clicking here.