Journal of Health & Life Sciences Law
Tax-Exempt Hospitals: Renewed Focus on
ABSTRACT: The Patient Protection and Affordable Care Act addressed
many of the problems experienced by indigent patients and the uninsured.
One set of changes establishes new structural and operational requirements
for hospitals that are tax exempt under § 501(c)( 3) of the Internal Revenue
Code. Under the new law, these hospitals will be required to assess the need
for indigent care in their service areas, report to the Internal Revenue Service
on their performance, and establish financial assistance policies. Tax-exempt
hospitals also will be limited in the ability to bill full “chargemaster” rates to
patients who qualify for financial assistance, or to engage in “extraordinary
collection actions” against such patients. For its part, the Internal Revenue
Service will be required to report to Congress periodically on the hospitals’
KEYWORDS: Health Reform, Tax Exempt, Hospitals, Internal Revenue
Service, Indigent Care, Financial Assistance Policy, Community Health Needs
THOMAS WM. MAYO, ESQUIRE, is an AHLA Fellow and Associate Professor at the SMU/
Dedman School of Law, where he teaches Health Care Law, Bioethics and Law, Non-profit Organizations, and Torts courses, among others. Contact him via email at tmayo@
CITATION: Thomas Mayo, Tax-Exempt Hospitals: Renewed Focus on Indigent Care, J. HEALTH
& LIFE SCI. L., October 2010, at 140. © 2010 American Health Lawyers Association, www.
healthlawyers.org/JHLSL. All rights reserved.