New requirements for nonprofit, 501 (c)(3), hospitals were enacted under the Patient Protection and Affordable Care Act (ACA), passed on March 23, 2010. One of the most significant of the new requirements is the Community Health Needs Assessment (CHNA) that must be conducted during taxable years after March 23, 2012 and submitted with IRS form 990. A CHNA must then be completed every three years following.
While the requirements are fairly new, the IRS has made strides in defining hospitals that must complete the CHNA as well as details of what is expected in the CHNA report to be submitted. At this time the only entities that must complete the CHNA are hospital organizations defined as:
- An organization that operates a State-licensed hospital facility
- Any other organization that the Secretary determines has the provision of hospital care as its principal function or purpose constituting the basis for its exemption under section 501 (c)(3).
The general goal behind the requirement is to gather community input that leads to recommendations on how the local hospital can better meet and serve residents’ needs. The community input is typically derived from a community survey and a series of open meetings. Local health data are presented. Community members then identify and prioritize their top health needs.
After listening to community input, the hospital defines an implementation strategy for their specific facility. The implementation strategy is a written plan that addresses each of the health needs identified in the community meetings. To meet Treasury and IRS guidelines an implementation strategy must:
- Describe how the hospital facility plans to meet the health need, or
- Identify the health need as one the hospital facility does not intend to meet and explain why the hospital facility does not intend to meet the health need
After the needs are identified that the hospital can address, the implementation strategy must take into account specific programs, resources, and priorities for that particular facility. This can include existing programs, new programs, or intended collaboration with governmental, nonprofit, or other health care entities within the community.