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Why Nonprofits Must Prepare Now for Closer IRS Scrutiny

Philip Betbeze, for HealthLeaders Media, September 30, 2011

The implication, says Regier, is that eventually these reports will be used by the agency to determine baseline measurements of the cost and benefit of various community benefit programs across the nation—a way to compare and contrast with an idea that some minimum standard might be implemented in future years.

In completing the community health needs assessment and action plan, Regier says, one huge complication has already arisen. Regulations seem to indicate that hospital facilities must satisfy these new obligations on a facility-by-facility basis. That means multi-facility health systems can't use one document for the entire organization—instead, the forms must be filed by each facility.

"It's the place where the IRS could give multi-hospital systems the most heartburn," Regier says. "They want to be able to do one system-wide community health needs assessment. If you require facility-by-facility implementation plans, you may lay on duplicative and unnecessary costs."

Regier says he worries that longer term, the IRS is constrained by the legislation into setting this needs assessment process up in a way that may not move the healthcare system toward the health policy goals of paying for population health management rather than paying for volume.

"The community needs health needs assessment could be a powerful tool on population health management," he says. "But if we set up a system that has the unintentional effect of making hospitals define their community as narrowly as possible, you don't use this tool and you suboptimize its ability to manage population health. At the same time, the IRS has to live with the statutory language they've got."

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1 comments on "Why Nonprofits Must Prepare Now for Closer IRS Scrutiny"


bob (9/30/2011 at 9:47 PM)
Regler does not seem to understand the essential difference between programs to improve population health and programs to improve community health. Both represent significant advances over the more traditional limited focus on patient care at most hospitals. Focusing on population health introduces methodologies reflecting the unique characteristics of various populations, especially those with comprehensive coverage and systematic management. Focusing on community health introduces even more exciting and quite different methodologies reflecting the power of community forces. Methodologies for improving population health do not necessarily focus on communities or take advantage of the power of effective community benefit projects and programs. Those professionals involved in community health improvement know that no two communities are alike and the leadership of each community is unique and most be actively involved in designing community benefit projects. I do not know of any existing health system with an active community benefit program in which the various initiatives are not designed and carried out at the local level. The affordable heath care act recognizes that reality, and should not be changed. Regler is well advised to support community benefit programs designed to improve community health rather than the health of particular enrolled or un-enrolled populations. I am sure he knows that a health system's service area does not meet anyone's definition of a community.