Community benefit and the Affordable Care Act: How will not-for-profit hospitals respond to change?

Changes to IRS reporting for not-for-profit hospitals (NFPs) impose new requirements for reporting community benefit. The Affordable Care Act (ACA) requires NFPs to conduct Community Health Needs Assessments for their service area that incorporates input from local stakeholders, e.g. public health agencies. Concurrent changes in payment mechanisms and anticipated declines in the uninsured population pose new challenges to NFPs.

Study Design: Systematic review of peer reviewed literature, policy briefs, IRS documents, and components of the ACA related to NFP hospitals.

Findings: The formation of Accountable Care Organizations, payment reforms, and anticipated decline in the need for “charity care” has the potential to drastically change the completive environment in which NFPs operate. NFPs may need to rethink their mission and identify new ways to distinguish themselves from for-profit hospitals in order to justify their tax exempt status.

Conclusions: Changes in laws, regulations, and public expectations are apt to impose pressure on NFPs to undertake a new model of how they maintain their tax exempt status and their relationship to the population they serve.