Update on New CHNA Regulations/Community Health
Improvement
Scott Dahl, MBADirector of Business Development East RegionHealthy Communities Institute
New Proposed Regulations on CHNAs
KEY DATES:
• April 2013: IRS issued new and updated proposed regulations providing 501(c)(3) hospitals additional guidance on the section 501(r) requirements for CHNA
• July 5, 2013: Comments on proposed regulations due to IRS• October 5, 2013: CHNA reports and implementation strategies completed
by this date will be considered compliant as long as they meet either set of requirements - prior guidance (IRS Notice 2011-52) or the proposed regulations; CHNA reports and implementation strategies completed after this date can no longer rely on the prior guidance
• August-December 2013: Publication of the final regulations expected to be issued, carrying the weight of law
CHNA change:• Need to identify, prioritize, and respond to “significant” community health needs• Free to determine significance based on relevant facts and circumstances, but you
must explain your process in CHNA Report• Focus on issues considered of utmost important without requiring disclosure of
insignificant issues
CHNA Change: “Significant” Health Needs
CHNA Change: “Significant” Health Needs
Status compared to others
Status compared to HP2020 or state/ community targets
Patterns
CHNA Change: “Significant” Health Needs
CHNA change:• Proposed regulations require that the CHNA report and implementation strategy be
approved by an authorized body• An authorized body is hospital’s governing body, a committee, or an individual that
has been authorized by governing body
CHNA Change: CHNA Report Approval
CHNA change:
Proposed regulations now allow a joint CHNA report and implementation strategy if: The hospitals collaborate in conducting their CHNAs The hospitals define their communities as the same The joint CHNA report is clearly identified as applying to each hospital The joint CHNA report is approved by an authorized body of each hospital
CHNA Change: Joint CHNA Reports and Implementation
CHNA Change: Joint CHNA Reports and Implementation
CHNA Change: Joint CHNA Reports and Implementation
CHNA change: • Proposed regulations require significantly more detail in the implementation strategy,
including:‒ The programs and resources the hospital plans to commit to addressing the health
need‒ The anticipated impact of the responses‒ A plan to evaluate such impact‒ Any planned collaboration with other hospitals or organizations
CHNA Change: Implementation Strategy Detail
CHNA Change: Implementation Strategy Detail
CHNA change: • Time extended for a hospital to complete its first implementation strategy• CHNA report and implementation strategy must generally be completed within the
same fiscal year, but first implementation strategy is considered compliant if it is approved by an authorized body within 4.5 months of its year-end (the same day the hospital’s Form 990 is initially due)
CHNA Change: Implementation Strategy Detail
CHNA change: • Include input from medically underserved populations
‒ now defined as “populations experiencing health disparities or at risk of not receiving adequate medical care as a result of being uninsured, underinsured, or due to geographic, language, financial, or other barriers”
CHNA Change: Input from Underserved Population
CHNA change: • Proposed regulations will require hospitals to make their CHNA reports and implementation
strategies widely available to the public until the next two CHNA processes are completed — approximately six years; previous guidance only indicated a time period of approximately three years
CHNA Change: CHNA Reports and Strategies Available
CHNA change: • Hospitals that recently have become subject to section 501(r) have until the end of the
second tax year (after the status change) to complete their first CHNA.
CHNA Change: CHNA Reports
Non-Compliance
Penalties for Non-compliance• Penalties for failure to complete the CHNA: $50,000 excise tax and/or loss of 501(c)(3)
status for failure in any area of 501(r)• For a health organization that operates multiple hospitals, and not all its hospitals are
compliant with 501(r) - the overall organization and each hospital will maintain their 501(c)(3) status, but the noncompliant hospital’s activities will become fully taxable under the same rules and be taxed at rates that apply to for-profit C Corporations
• IRS will decide whether to revoke a hospital’s 501(c)(3) status based on the relevant facts and circumstances, including:‒ The size, scope, nature, and significance of the failure;‒ Whether the failure is a repeat offense;‒ Whether the organization had followed procedures to facilitate overall compliance;‒ Whether the failure was corrected as promptly;‒ Whether the organization adjusted its procedures to avoid the failure in the future; and‒ Whether the hospital took corrective actions before the failure was caught by the IRS.
• IRS providing two safe harbors for which a failure does not trigger consequences: an error or omission that is minor, inadvertent, and due to reasonable cause, will not be considered a failure if the hospital corrects it promptly; if a failure was neither willful nor egregious, if the hospital corrects the failure promptly, and if the hospital discloses the issue
New Proposed Regulations on CHNAs
KEY DATES:
• July 5, 2013: Comments on proposed regulations due to IRS
• October 5, 2013: CHNA reports and implementation strategies completed by this date will be considered compliant as long as they meet either set of requirements - prior guidance (IRS Notice 2011-52) or the proposed regulations; CHNA reports and implementation strategies completed after this date can no longer rely on the prior guidance
• August-December 2013: Watch for publication of the final regulations, carrying the weight of law
Healthy Communities 2013 Achievement Awards
By localizing to a zip code level, we were able to zone in on one elementary school and one school system (MSD Lawrence: Brook Park Elementary in zip code 46226). 91% of students are asthmatic. Community Health Network now employs a school nurse and the Jane Pauley Community Health Clinic on campus.
Community HealthNetwork - Indiana
