IRS Extends Due Date for Community Health Needs Assessment Again

By Nicholas Porto July 15, 2020

On July 14, 2020, the IRS released notice 2020-56 to further delay the due date for hospital organizations with respect to their community health needs assessment (CHNA) and related Implementation Strategy until December 31, 2020.

Under 501(r)(3), state-licensed hospital organizations are required to complete a CHNA at least once every three years. The CHNA must also be made widely available to the public no later than the end of the third taxable year since its last CHNA.

Earlier this year, the IRS extended the due date until July 15, 2020 for any hospital organization required to complete a CHNA between April 1, 2020 and July 15, 2020. The notice issued yesterday further extends the CHNA due date for an “affected hospital organization” until December 31. Per the definition in the recent notice, any hospital that is required to complete a CHNA between April 1 and December 31 of this year is considered to be an affected hospital organization.

501(r)(3) also requires a hospital organization to adopt an implementation strategy through governing body approval within four and a half months after the year-end in which it completes its most recent CHNA. Notice 2020-56 also delays this requirement until December 31, 2020.

Given the amount of time and effort that goes into completing a CHNA, the issue date of Notice 2020-56 being one day before the deadline will likely be a moot point for hospitals. However, at the very least, hospitals now have a bit more time to adopt an implementation strategy and any hospital that was not close to completing its CHNA last week will not have to worry about incurring the $50,000 excise tax penalty that comes with failing to meet the CHNA and Implementation Plan deadline.

For more information or a discussion on how this may impact you, please contact your BNN advisor at 800.244.7444.