Hospitals: Form 990 is too much paperwork

IRS regulations detract from providing actual health care, hospitals say

Not-for-profit hospitals last week pushed back on the IRS's revised Form 990, warning that the changes are redundant and telling a House Ways and Means subcommittee that the paperwork is simply "too burdensome."

The Internal Revenue Service (IRS) proposed criteria last year under the federal health reform law requiring tax-exempt hospitals to conduct an assessment every three years beginning in 2012. The law also included changes to Schedule H, a separate questionnaire included in the Form 990 that details charity care, community benefits, and other operating costs.

In a letter to IRS on Wednesday, the American Hospital Association (AHA) and the Healthcare Financial Management Association (HFMA) contend that changes to Form 990's Schedule H have led to redundancies and onerous new paperwork.

For example, to meet new requirements, multihospital systems often must provide the same answers, which "Professional tax counsel has estimated that for some systems, Schedule H could span as many as 200 pages."

Testifying before the House Ways and Means Oversight Subcommittee on Wednesday, VHA's Michael Regnier urged the committee to avoid taking any further action that would jeopardize the income tax exemption for charitable hospitals and ensure “that hospitals [can] direct their limited resources toward meeting their communities’ most significant health needs as opposed to complying with excessively burdensome paperwork requirements."

AHA’s April report found that not-for-profit hospitals put an average of 11.3 percent of their total spending toward community benefits, such as free and subsidized care (Zigmond, Modern Healthcare, 5/17 [subscription required]; AHA News, 5/16).

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