What Is a Community Health Needs Assessment (CHNA)?
The Patient Protection and Affordable Care Act (ACA) added section 501(r) to the Internal Revenue Code which imposes new requirements on 501(c)(3) organizations that operate one or more hospital facilities. Under section 501(r), each hospital facility operated by a 501(c)(3) organization must meet the following four general requirements on a facility-by-facility basis in order for the organization to maintain its 501(c)(3) tax-exempt status:1
- Establish written financial assistance and emergency medical care policies
- Limit amounts charged for emergency or other medically necessary care to individuals eligible for assistance under the hospital's financial assistance policy
- Make reasonable efforts to determine whether an individual is eligible for financial assistance before engaging in extraordinary collection actions
- Conduct a CHNA and adopt an implementation strategy at least once every three years
The final regulations2 (effective December 29, 2014) provide that a hospital facility must define the community it serves and assess the health needs of that community.
- Community served: For the purposes of a CHNA, a hospital facility may define the community it serves geographically or take into account target populations or specialized functions. However, a community cannot be defined in a manner that excludes medically underserved, low-income, or minority populations.
- Assessing community health needs: A hospital facility conducting a CHNA must identify and prioritize the significant health needs of the community it serves. Hospitals have flexibility in determining whether a health need is significant; there are no requirements to use a particular methodology or specific criteria to prioritize significant health needs (only examples of criteria are provided).
- Community input: A hospital facility must consider input from persons who represent the interests of the community served, including those with special knowledge or expertise in public health. The final regulations require that the hospital facility consider, at a minimum, input from the following:
- At least one state, local, or regional governmental public health department
- Members of medically underserved, low-income, and minority populations in the community, or individuals or organizations serving or representing their interests
- Written comments received regarding the hospital’s most recent CHNA and most recently adopted implementation strategy
- Documentation: A hospital facility must document the following in its CHNA report:
- Definition of the community served and how the community was defined
- Process and methods used to conduct the CHNA
- Community input received
- Prioritized description of the significant health needs of the community and a description of the process and criteria used in identifying certain health needs as significant and prioritizing those significant health needs
- A description of resources potentially available to address the significant health needs identified
A general summary of community input is required (including how and over what time period input was provided), but the report does not need to specifically name individuals who provided input. Every hospital facility must document its CHNA in a separate report. However, the proposed regulations recognize collaboration, and joint CHNA reports may be accepted under appropriate circumstances.
- Make the CHNA report widely available to the public: the CHNA report must be made widely available to the public via a hospital facility’s website
Internal Revenue Service Reporting Requirements: Form 990 Schedule H
A tax-exempt hospital must file an IRS Form 990 Schedule H to provide information on the activities and policies of, and community benefit provide by its hospital facilities and other non-hospital health care facilities it operated during the tax year. Schedule H was revised after passage of the ACA to gather the information stipulated by the ACA and described above.
The IRS Form 990 Schedule H includes a checklist of the items required in the CHNA and a list of non-hospital facilities website(s) on which the CHNA was published. In Section C it requires further detail, including:
- How the hospital facility took into account input from people who represent the community
- The people with whom the hospital facility consulted.
- A list other hospital facilities or other organizations with whom the CHNA was conducted.
- How the hospital facility is addressing the significant needs identified in its most recently conducted CHNA and any such needs that are not being addressed together with the reasons why such needs are not being addressed.
Schedule H also requires the hospital to attach its Implementation Strategy or reference a website where it can be found.
Although the Schedule H was made mandatory in 2009, the IRS has stated that the benefits of Schedule H are intended to be increased transparency, and compliance, and not to create a bright line standard for determining whether a hospital should be tax exempt.
- Centers for Disease Control and Prevention. Office for State, Tribal, Local and Territorial Support. Public Health Law Program. Summary of the Internal Revenue Service’s April 5, 2013, Notice of Proposed Rulemaking on Community Health Needs Assessments for Charitable Hospitals.
- Internal Revenue Service. Internal Revenue Bulletin: 2015-5. TD 9708. Additional Requirements for Charitable Hospitals; Community Health Needs Assessments for Charitable Hospitals; Requirement of a Section 4959 Excise Tax Return and Time for Filing the Return. February 2, 2015.