A dozen hospital and health care organizations have written to the Internal Revenue Service expressing concerns with recent revisions in the Form 990 Schedule H.

The groups, which include the American Hospital Association, the Health Care Financial Management Association, and the VHA Inc. nonprofit health care network, wrote a letter on April 20 to the IRS Tax-Exempt & Government Entities Division requesting changes in the revisions the IRS recently made to Schedule H and its instructions. Schedule H is used by tax-exempt hospitals to detail charity care and community benefit.

In the letter, the organizations 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, and go beyond what the statute requires and are inconsistent with previously submitted recommendations to the IRS from VHA Inc. and other health industry organizations. They said the new requirements fail to address key issues, including the consequences of a facility's failure to meet Schedule H requirements.

“The IRS revised the Schedule H and Instructions rather than engaging in the promulgation of proposed regulations with proper notice and comment period,” the groups wrote. “This is contrary to standard procedures and, in the context of a new federal tax exemption standard, denies hospitals the benefits and protections of a deliberative regulatory process that includes notice and opportunity for comment under the Administrative Procedure Act.”

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