Tax-exempt hospitals to get an IRS checkup on federal law compliance

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, sent a letter to the IRS asking the agency for information about nonprofit, tax-exempt hospitals and whether they are meeting statutory requirements under federal law, the senator's office announced Feb. 25.

In his letter to IRS Commissioner Charles Rettig, he asked for an update on agency reviews of nonprofit hospital compliance with requirements for tax-exempt status.

Mr. Grassley said he wants data on the number of hospitals that are compliant with section 501 of the Internal Revenue Code stipulating that nonprofit, tax-exempt hospitals meet requirements regarding community health needs assessment, financial assistance policy, charges billed to patients and billing and collection.

The senator also asked about the status of IRS reviews of noncompliant hospitals.

"Making sure that tax-exempt hospitals abide by their community benefit standards is a very important issue for me.  As chairman of the Senate Judiciary Committee, I oversaw an investigation into the billing practices of the [St. Joseph, Mo.-based] Mosaic Life Care hospital. That investigation resulted in debt relief of almost $17 million for thousands of low-income patients.  This issue is still just as important to me now that I am chairman of the Senate Finance Committee," Mr. Grassley wrote.

This is not the first time Mr. Grassley has probed compliance of nonprofit hospitals. About a year ago, the senator and then-Senate Finance Committee Chairman Orrin Hatch of Utah asked the IRS for information about how the agency reviews nonprofit hospital compliance with section 501.

Mr. Grassley said the agency provided information on that process, and he now seeks the agency's help in his efforts "to ensure the Internal Revenue Code is enforced vigilantly."

 

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