General Instructions

Note: Terms in bold are defined in the Glossary of the Instructions for Form 990.

Background. The Patient Protection and Affordable Care Act (Affordable Care Act), enacted March 23, 2010, P.L. No. 111-148, added section 501(r) to the Code. Section 501(r) includes additional requirements a hospital organization must meet to qualify for tax exemption under section 501(c)(3) in tax years beginning after March 23, 2010. These additional requirements address a hospital organization's financial assistance policy (FAP), policy relating to emergency medical care, billing and collections, and charges for medical care. Also, for tax years beginning after March 23, 2012, the Affordable Care Act requires hospital organizations to conduct community health needs assessments.

Because section 501(r) requires a hospital organization to meet these requirements for each of its hospital facilities, Part V, Facility Information, has been expanded to include a Section A, Hospital Facilities . In this section, a hospital organization must list its hospital facilities; that is, its facilities that, at any time during the tax year, were required to be licensed, registered, or similarly recognized as a hospital under state law. Part V also includes Section B, Facility Policies and Practices, for reporting of information on policies and practices addressed in section 501(r). The hospital organization must complete a separate Section B for each of its hospital facilities or facility reporting groups listed in Section A.

Section 6033(b)(15)(B) also requires hospital organizations to submit a copy of their audited financial statements to the IRS. Accordingly, a hospital organization that is required to file Form 990 must attach a copy of its most recent audited financial statements to its Form 990. If the organization was included in consolidated audited financial statements but not separate audited financial statements for the tax year, then it must attach a copy of the consolidated financial statements, including details of consolidation. See the instructions for Form 990, Part IV, line 20b.

Part V, Section D, requires an organization to list all of its non-hospital health care facilities that it operated during the tax year, whether or not such facilities were required to be licensed or registered under state law. The organization shouldn't complete Part V, Section B, for any of these non-hospital facilities.

Tip: Section 501(r) final regulations are applicable for tax years beginning after December 29, 2015.