Congress should consider specifying in the Internal Revenue Code what services and activities it considers sufficient community benefit for tax-exempt hospitals, the Government Accountability Office said today in a report.

The agency was tasked by Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and House Ways and Means Committee Ranking Member Kevin Brady, R-Texas, with assessing how the Internal Revenue Service oversees hospital community benefits and enforces Affordable Care Act requirements related to tax-exempt hospitals.

The report also recommends that the Internal Revenue Service:

  • update Form 990, including Schedule H and instructions where appropriate, to ensure that the information demonstrating a hospital’s community benefit is clear, including the community benefit factors;
  • assess the benefits and costs of requiring tax-exempt hospital organizations to report community benefit expenses on Schedule H by individual facility rather than by collective organization and take action as appropriate;
  • establish a well-documented process to identify hospitals at risk for noncompliance with the community benefit standard; and
  • establish specific audit codes for identifying potential noncompliance with the community benefit standard.

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