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  • Washington Highlights

    Finance Chairman Requests Information on Hospital Non-Profit Exemptions

    Allyson Perleoni, Director, Government Relations
    Len Marquez, Senior Director, Government Relations

    Senate Finance Committee Chairman Chuck Grassley (R-Iowa) Feb. 19 sent a letter to Internal Revenue Service (IRS) Commissioner Charles P. Rettig requesting information on nonprofit hospitals with tax-exempt status. The letter poses several questions, most of which center around reports that hospitals have increased revenue while cutting charity care.

    Chairman Grassley has a history of interest in nonprofit exemptions and led a Senate Finance Committee investigation on nonprofit exemptions more than a decade ago. The Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) increased oversight of nonprofit hospitals to ensure their tax savings were being used to subsidize priorities such as patient care.

    This letter marks a follow-up to another letter that Grassley sent to the IRS in 2018, which inquired as to the IRS’ process for reviewing hospital compliance with the Internal Revenue Code. Nonprofit hospitals qualify for their tax-exempt status by meeting several qualifications under the Internal Revenue Code Section 501(r), including community health needs assessment requirements, financial assistance policy requirements, requirements on charges billed to patients, and billing and collection requirements.

    In the letter, Grassley states that “making sure that tax-exempt hospitals abide by their community benefit standards is a very important issue for me.”

    Responses are due back to the committee by April 1.