IRS Clarifies Provider Listing Requirement
Background
As outlined above, the final regulations provide that a hospital facility’s written FAP must contain six components including, as outlined above, the requirement to incorporate in its FAP a listing of hospital providers, other than the hospital facility, delivering emergency or other medically necessary care in the hospital facility. In addition, hospital facilities are required to specify those providers who are covered by the hospital’s FAP and those who are not.
As a result of many comments and responses from the community, the IRS not only understood that the provision generated great concern and confusion but agreed to address the matter internally.
IRS Notice 2015-46
Despite comments from the community, the American Hospital Association and the Association of American Medical Colleges, the IRS released Notice 2015-46 wherein it clarified that a charitable hospital’s FAP must include this list of providers, other than the hospital facility itself, that deliver emergency or other medically necessary care at the hospital facility. Although commenters stated that the listing would include hundreds of doctors practicing at hospitals, the provision was upheld manly due to the fact that many patients treated at a hospital facility believe that all doctors that treat them are covered under the hospital facility’s FAP.
In addition, the Notice also provides further clarification including:
- If a provider is covered under a hospital facility’s FAP in certain instances and not others, the FAP must describe in detail the circumstances in which services provided are covered under the FAP; and
- The listing of providers can be kept in a document separate from the FAP itself (such as an exhibit or appendix) as long as the listing includes the date it was created or most recently updated.
The Notice also includes a definition of the “reasonable steps” a hospital facility should take to ensure the listing is complete and accurate.
In addition to the above, the IRS has released a series of rules related to:
- The decision by a hospital facility as to whether individual providers, or the group in which the individual physician practices, should be listed;
- The process for updating an existing listing; and
- The effect of errors or omissions.
Conclusion
As with the final regulations, IRS Notice 2015-46 is effective for a charitable hospital facility’s taxable year beginning after December 29, 2015. Hospital facilities need to ensure that the listing of providers is kept up to date on a frequent basis as this provision will create significant record keeping as it relates to a hospital facility’s FAP.
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