With the finalization of the 501r regulations in December 2014, the IRS has begun to send audit letters to hospitals that have failed the initial IRS

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With the finalization of the 501r regulations in December 2014, the IRS has begun to send audit letters to hospitals that have failed the initial IRS compliance review of the Community Health Needs Assessment (CHNA) requirements.

The first CHNA was required to be conducted and made widely available by the end of December 2013. The main failure generating these audits is not having the CHNA posted to the hospital’s website and/or not having the most current two years posted.

With many hospitals starting the assessment process again, here is a quick review of what is required for your CHNA and Implementation Strategy (IS):

Community Health Needs Assessment

• Your CHNA is a written assessment completed every three years and looks at the needs in your community.
• Your CHNA must define the community, acquire input from the community, and assess its needs.
• Your CHNA is considered conducted/completed and made widely available when posted to your hospital's website.
• CHNA reports for the most current two years are required to be on your hospital's website.
• Your CHNA must be approved by governing body.

Implementation Strategy

• Your IS is a written three-year plan that documents which needs are being addressed and which are not being addressed.
• Your IS must address most significant needs, but not all the needs identified have to be "significant."
• Your IS must be approved by governing body.
• Your IS must be approved by the 15th day of the 5th month following the end of the tax year your CHNA is completed.

If you are a Form 990 filer, you are also required to:
• have an annual update on your IS
• and provide the web address and location of your CHNA and IS.

If you have questions on the CHNA and IS requirements or received an IRS letter and would like assistance responding to these inquiries, let us know. We're happy to help.

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