In an ongoing effort to evaluate nonprofit hospitals required to follow Section 501 (r) of the Internal Revenue Code focused on charity care, U.S. Sen. Chuck Grassley, R-Iowa, has requested data on the number of hospitals that are in compliance with the requirements from the Internal Revenue Service in the last year.

Hospitals subject to 501 (r) must complete a community health needs assessment, meet financial assistance policy requirements, adhere to limitations on charges and follow billing and collection practices.

The IRS’ 501 (r) requirements for nonprofit hospitals, in effect on Dec. 29, 2015, marked a complex change for the health care collections industry, health care providers, patients and more.  Grassley has been a watchdog for the program for several years, prompting a recent letter to IRS Commissioner Charles Rettig with the request for information on nonprofit hospitals’ compliance.

Specifically, Grassley is seeking information about whether tax-exempt hospitals are meeting the statutory requirements laid out in section 501 (r) of the Internal Revenue Code, according to a news release.  “Making sure that tax-exempt hospitals abide by their community benefit standards is a very important issue for me,” he said.

In February 2018, Grassley and former Senate Finance Committee Chairman Orrin Hatch, R-Utah, pressed the IRS for information on enforcement practices and compliance data on nonprofit hospitals.  Grassley has continually urged greater compliance among nonprofit hospitals.  On an annual basis, according to Grassley’s letter, the IRS reviews about one-third of the approximately 3,000 tax exempt hospitals for compliance.

The letter requests an update on those reviews, including those that were resolved upon contact with the hospital, required a compliance check or follow-up investigation as well as how many hospitals were not in compliance with these specific requirements:

Community Health Needs Assessment

Financial Assistance Policy Requirements

Requirements on Charges Billed to Patients

Billing and Correction Policies

Read more on Senator Grassley’s request here:  What is your experience as a hospital required to comply with 501 (r) or as a collection agency working on revenue cycle management with these hospitals? Share your thoughts with ACA International’s Communications Team at, Attn: Katy Zillmer.

Harry Strausser, ACA International’s Education and Membership Development Director, and Irene Hoheusle, vice president of collections and education at Account Recovery Specialists Inc., recently discussed health care collections trends, including 501 (r), in an episode of ACA Cast.