On December 31, 2014, the Internal Revenue Service issued the long-awaited final ruling implementing Section 501 (r) of the Patient Protection and Affordable Care Act of 2010 (ACA). This new section of the Internal Revenue Code increases the legal obligations of nonprofit hospitals to address community health needs as a condition of retaining their nonprofit tax status. The legislative intent is to direct attention to the elimination of “root causes of disease,” especially among medically underserved, minority, and vulnerable populations.
As outlined in the proposed rule, a community health needs assessment (CHNA) must identify “significant health needs” in the community. Examples given in the final ruling include not only financial and other barriers to health care but also “the need to prevent illness, ensure adequate nutrition and address social, behavioral, and environmental factors that influence health in the community” (emphasis added).
The language in the final ruling makes clear that the scope of the community benefit responsibility of tax-exempt (nonprofit) hospitals has increased to include the promotion of population health, rather than retaining a narrow focus on individuals’ access to and ability to pay for clinical care. This broadened scope of community benefit responsibility and the inclusion of “adequate nutrition” as a determinant of population health opens up exciting possibilities as these hospitals continue to develop their community benefit programs. Under the final ruling, nonprofits are encouraged to collaborate and partner with third parties in the community, such as food banks and farmers markets.
The final ruling specifies several requirements of the CHNA in addition to identifying significant health needs in the community. A CHNA must
- Reflect community input and summarize written public comments received
- Be widely disseminated to the public
- Include an evaluation of the impact of any actions taken to address significant health needs identified in previous CHNAs
- Identify resources in the community that could be harnessed to meet significant health needs
In addition to conducting a CHNA on a three-year cycle, the final ruling requires non-profit hospitals to create an implementation plan and to provide annual reporting of their implementation progress.
An implementation plan is to be attached to the hospital’s Form 990 in the year it is completed (alternatively, the URL for the web pages on which the hospital has posted the plan can be provided). Here again, the regulations seek to clarify that the implementation plan, like the CHNA, in its determination of “significant health needs” may describe interventions designed to prevent illness; ensure adequate nutrition; or to address social, behavioral, and environmental factors that influence community health. Like the CHNA, the implementation plan must be approved by the hospital’s governing body.
Annual reporting via the hospital’s Form 990 is also required. Reporting should describe how a hospital facility is “actually addressing” the significant health needs identified in the CHNA. As with the implementation plan, the annual reporting may be accomplished by providing the URL of the website on which the implementation plan is posted.
Fresh Advantage® is extremely proud of its role in having “ensuring adequate nutrition” included as a means by which nonprofits can meet their community benefit obligations. Without the advocacy of the many organizations (led by Fresh Advantage and Wholesome Wave) that commented on the proposed regulation, the additions specifically addressing “access to adequate nutrition” would not have been made. Given that food insecurity and poor nutrition are consistently linked with illness and chronic disease, regular access to nutritious food is mandatory for an improvement in population—and individual—health among Americans.
Section 501(r) of the ACA and the final rule’s new provision in the Internal Revenue Code take a great step forward by clarifying that the community benefit obligation is a form of social contract for public health in local communities. If the legislative intent of addressing “root causes of disease” is to be realized over time, the intended policy changes will need to be implemented with vigor and sincerity as hospitals engage with the communities they serve, beyond their own patient populations. Similarly, it will require that community stakeholders and interested members of the public create new forms of communication and partnerships with their non-profit hospital neighbors.
Please contact Marydale DeBor for information about how Fresh Advantage® can assist your non-profit hospital with conducting a CHNA or incorporating access to healthy food as part of a community benefit program that will meet the requirements of the final ACA ruling.