Document Type

Article

Publication Date

2016

Abstract

The Affordable Care Act created new conditions of federal tax exemption for nonprofit hospitals, including a requirement that hospitals conduct a community health needs assessment (CHNA) every three years to identify significant health needs in their communities and then to develop and implement a strategy responding to those needs. As a result, hospitals must now do more than provide charity care to their patients in exchange for the benefits of tax exemption, and the CHNA requirement has the potential both to prompt a radical change in hospitals’ relationship to their communities and to enlist hospitals as meaningful contributors to community health improvement initiatives. Final regulations issued in December 2014 clarify hospitals’ obligations under the CHNA requirement, but could do more to facilitate hospitals’ engagement in collaborative community health projects. The IRS has a rich opportunity, while hospitals are still learning to conduct CHNAs, to develop guidance establishing clear but flexible expectations for how they assess and address community needs. This Article urges the IRS to seize that opportunity by refining its regulatory framework for the CHNA requirement to more robustly promote transparency, accountability, community engagement, and collaboration, while simultaneously leaving hospitals a good degree of flexibility. By promoting alignment between hospitals’ regulatory compliance activities and broader community health improvement initiatives, the IRS could play a meaningful role in efforts to reorient our system towards promoting health and not simply treating illness.

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