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AAMC Comments on IRS Proposed Rule

September 28, 2012—The AAMC submitted a Sept. 24 comment letter  to the Internal Revenue Service (IRS) in response to the June 26 proposed rule, Additional Requirements for Charitable Hospitals.  The proposed rule implements Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) requirements for 501(c)(3) hospitals to have both a financial assistance policy and an emergency medical care policy, and spells out actions that must occur before a hospital engages in “extraordinary collection actions.”

The letter notes that “AAMC members receive benefits from having a tax exempt status, but they also have long traditions and missions that confirm a strong commitment to serving their communities and to meeting Federal and State legal and regulatory requirements.” The Association commented that many of the requirements were overly prescriptive and suggested that hospitals must have more latitude to fulfill the statute’s requirements.

The letter stresses the importance of ensuring that:

  • the community and patients are aware of the financial assistance available, know how to complete the requisite application, and have adequate time to do so;
  • hospitals have a transparent policy for making objective timely decisions regarding financial assistance and attempts to complete incomplete applications or to find other sources of information that would lead to a conclusion about whether the patient qualifies for assistance; and
  • patients are given sufficient warning and explanation that if they do not cooperate, or pay amounts owed in a timely fashion, they will be subject to certain collection actions, some of which may be extraordinary collection actions (ECAs).

In a future rulemaking the IRS will release proposals for implementing the ACA requirement for 501(c)(3) hospitals to conduct and implement a community health needs assessment.


Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806