SECTION 5. CORRECTION

.01 Correction principles . Correction must be made in accordance with the following principles:

(1) Restoration of affected persons . To the extent reasonably feasible, the correction should be made with respect to each affected person, if any, and should restore the affected person(s) to the position they would have been in had the failure not occurred, regardless of whether the harm suffered by the affected person(s) occurred in a prior year and regardless of whether such prior year is a closed taxable year.

(2) Reasonable and appropriate cor- rection . The correction should be reasonable and appropriate for the failure. Depending on the nature of the failure, there may be more than one reasonable and appropriate correction.

(3) Timing . The correction should be made as promptly after discovery as is reasonable given the nature of the failure.

(4) Implementation/modification of safe- guards . If the hospital organization has not established practices and procedures (whether informal or formal) for its hospital facility or facilities that are reasonably designed to achieve each facility’s compliance with the requirements of § 501(r), the hospital organization should establish such practices and procedures as part of its correction. If the hospital organization has established practices and procedures for its hospital facility or facilities to achieve compliance with § 501(r) but those practices and procedures failed to anticipate the particular type of failure that occurred, the hospital organization should determine if changes to its practices and procedures are needed to reduce the likelihood of that type of failure recurring and to assure prompt identification and correction of any such failures that do occur. If it identifies any such changes to its practices and procedures, it should implement those changes.

.02 Examples . The provisions of section 5.01 may be illustrated by the following examples. For purposes of these examples, assume that the hospital facility corrected the failure with respect to all

affected persons as promptly after discovery as is reasonable given the nature of the failure and put into place revised or newly established practices and procedures to minimize the likelihood of the failure recurring.

(1) A hospital facility that has failed to adopt a CHNA report that contains all of the elements required by § 1.501(r)–3 may correct the failure by preparing and adopting a CHNA report containing all of the required elements and making the corrected CHNA report widely available on a Web site within the meaning of § 1.501(r)–1(c)(4) of the 2013 proposed regulations.

(2) A hospital facility that has failed to adopt a FAP that contains all of the elements required by § 1.501(r)–4 may correct the failure by establishing a FAP containing all of the required elements, including making the corrected FAP widely available on a Web site within the meaning of § 1.501(r)–1(c)(4) of the 2013 proposed regulations. (3) A hospital facility has failed to meet the requirements of § 1.501(r)–5 because, due to processing errors, it charged FAP-eligible individuals more than an amount permitted under that section. The errors were discovered during the monthend accounting period closing. The hospital facility may correct the failure by providing all of the affected FAP-eligible individuals with an explanation of the error, a corrected billing statement, and a refund of any payments the individuals made to the hospital facility (or any third party) in excess of the amount they are determined to owe as FAP-eligible individuals.

(4) If a hospital facility fails to properly implement a policy required under § 1.501(r)–4 and that failure does not involve overcharging a FAP-eligible individual or engaging in an ECA (for example, a failure to widely publicize a FAP in the manner described in the FAP), the hospital facility may correct the failure by beginning to implement the policy correctly and taking reasonable actions to compensate for the failure (such as doing additional outreach or advertising of the FAP in local media in the case of a failure to widely publicize the FAP).