CHA News Article

IRS Clarifies Requirement that Tax-Exempt Hospitals’ Financial Assistance Policy Include Provider List

The Internal Revenue Service has released the attached Notice 2015-46 clarifying how tax-exempt hospitals may comply with the requirement in the Dec. 31, 2014 final rule — enacted as part of the Affordable Care Act — that hospital facilities include a list of providers in their financial assistance policies (FAP). The notice only affects tax-exempt hospitals and is applicable to taxable years beginning after Dec. 29, 2015.

The notice clarifies that to meet this requirement, hospitals may list the names of individual doctors, practice groups or any other entities providing emergency or medically necessary care in the hospital facility by the name used either to contract with the hospital or to bill patients for care provided. Alternatively, a hospital may specify providers by reference to a department or a type of service if the reference makes clear which services and providers are covered. If a provider is covered by a hospital facility’s FAP in some circumstances but not in others, the hospital must describe the circumstances in which the emergency or other medically necessary care delivered by the provider will and will not be covered by the FAP.

Additionally, a hospital’s provider list must indicate whether the services of a particular provider are covered by the FAP but is not required to indicate whether that provider’s services are (or may be) covered by another entity’s financial aid policy or program.

Notice 2015-46 permits hospitals to maintain the list of providers in a document separate from the FAP, such as in an appendix, provided that the document includes the date on which it was created or last updated. If a hospital maintains its provider list in a document separate from the FAP, the FAP must state that the list of providers is maintained in a document separate from the FAP and explain how members of the public may readily obtain it free of charge, both online and on paper.

The notice also clarifies that if the only change a hospital facility makes to its FAP is to update the provider list (whether the provider list is in the FAP or in a separate document), the FAP does not need to be adopted by an authorized body of the hospital again in order for the FAP to continue to be considered “established.”

Additionally, Notice 2015-46 clarifies that omissions or errors in a hospital‘s provider list, including a failure to include a provider in that list or to identify a service covered by the FAP, will be considered minor and either inadvertent or due to reasonable cause if the hospital takes reasonable steps to ensure its list of providers is accurate. A hospital that updates its list of providers by adding new or missing information, correcting erroneous information and deleting obsolete information at least quarterly will be considered to have taken reasonable steps to ensure its list is accurate and will be considered to have corrected any minor omissions or errors in the list.