April 25, 2011 08:00 ET

VHA Inc. Supports Industry-Wide Concerns on IRS Schedule H Requirements

Organizations Representing More Than 6,500 Hospitals and 23,000 Non-Acute Health Care Organizations Submit Letter Seeking Guidance and Clarification

IRVING, TX--(Marketwire - Apr 25, 2011) - VHA Inc., the national health care network, today announced that it has joined the American Hospital Association, (AHA), the Healthcare Financial Management Association (HFMA) and 10 state/metropolitan hospital associations in requesting changes in the revisions the Internal Revenue Service (IRS) recently made to the Form 990, Schedule H and Instructions. Schedule H is used by tax-exempt hospitals to detail charity care and community benefit.

In an April 20 letter addressed to the IRS Tax-Exempt & Government Entities Division, these organizations summarized their cumulative concerns and urged the IRS to issue clear and usable guidance on the new tax-exemption standards under the Patient Protection and Affordable Care Act.

The letter stated that the new Schedule H requirements:

  • Are onerous, redundant and out of step with President Obama's call to reduce paperwork and decrease administrative costs in health care.
  • Go beyond what the statute requires and are inconsistent with previously submitted recommendations to the IRS from VHA Inc. and other health industry organizations.
  • Fail to address key issues, including the consequences of a facility's failure to meet Schedule H requirements.

"We know the Affordable Care Act gave the IRS new regulatory obligations to fulfill," said Michael Regier, senior vice president of legal and corporate affairs and general counsel at VHA. "But we believe the recent Schedule H and Instructions could be improved and look forward to working with the IRS to develop a clearer, more reasonable approach."

According to VHA executives, the new Form 990 Schedule H is the IRS' first effort to exercise its expanded regulatory and enforcement authority provided under Section 9007 of the Affordable Care Act (ACA), that created new requirements for hospitals that desire to maintain tax-exempt status.

VHA, along with the other leading membership organizations, represents more than 6,400 hospitals, 23,000 non-acute health care organizations and 35,000 health care financial executives plus more than 40,000 individual member organizations.

About VHA
VHA Inc., based in Irving, Texas, is a national network of not-for-profit health care organizations that work together to drive maximum savings in the supply chain arena, set new levels of clinical performance and identify and implement best practices to improve operational efficiency and clinical outcomes. In 2009, VHA delivered record savings and value of $1.47 billion to members. Formed in 1977, VHA serves nearly 1,350 not-for-profit hospitals and more than 30,000 non-acute care providers nationwide, coordinating delivery of its programs and services through its 16 regional offices. VHA has been listed as one of the best places to work in health care by Modern Healthcare since 2008 and one of the best places to work in IT by Computer World since 2007.

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