M E M O R A N D U M
TO: AHLA Board of Directors and PG Staff
FROM: James R. King
DATE: June 10, 2011
RE: Tax & Finance PG Report
This is my final report as PG chair. It has been a real pleasure, and a great privilege, to be able to work with my AHLA colleagues in this capacity. AHLA is a great organization, and my vice chairs and the PG staff have been great to work with.
PG Leadership
In addition to me, the current leadership consists of Travis Blais from Mintz Levin as Vice Chair for Educational Programs, Christie Lohkamp from Mayo Clinic as Vice Chair for Membership and Chair of our In-House Counsel Affinity Group, Don Stuart from Waller Lansden as Vice Chair for Research & Website, Elizabeth Mills from Proskauer Rose as Vice Chair for Publications, and Lauren Mack from SNR Denton as Chair of our Tax-Exempt Finance Affinity Group.
Except for Travis Blais and me, the remaining members of current leadership will continue next year. Elizabeth Mills will succeed me as Chair. Travis Jackson from Jones Day’s Boston office and Stephanie Switzer from the Cleveland Clinic will come on as new Vice Chairs. Travis and Stephanie are high intellect, high energy people, and they will be great additions to the PG leadership.
Podcast Initiative
Under Christie Lohkamp’s leadership, and with the able assistance of Brandon Morris from Jones Day’s New York office, we have our “podcast” initiative up and running. This initiative involves a series of basic introductions to various topics of relating to tax exemption for health care organizations and consists of an audio tape and supporting written materials on the topics covered. We received a very good response from our request for speakers/authors for this project, and we are hopeful for continued interest and activities participation from the speakers/authors.
Presence on Facebook
We continue to look for ways to use our presence on our Facebook page. We believe our Facebook page will enhance our ability to deliver breaking news, email alerts, and executive summary articles in digital format in real time. COI-1460902v1 Annual Meeting Luncheon
Don Stuart has another excellent luncheon program planned for the Annual Meeting in Boston. Our speaker will be David Spackman, former Chief, Non-Profit Organizations/Public Charities Division, Office of the Massachusetts Attorney General. Mr. Spackman’s topic will be, “The Attorney General: Keeping a Close Eye on Hospital Transactions and Operations,” and will include discussion of recent transactions in Massachusetts in which tax-exempt hospitals sold assets and operations to for profit operators. Mr. Spackman’s presentation is timely in that there is an increasing interaction and sharing of information between the IRS and state attorneys general. See our Email Alert of March 31, 2011, “Not Just for Tax Geeks – New Proposed Regulations Tighten IRS, State Attorney General Ties.” After Mr. Spackman’s presentation, Don will moderate a question and answer session.
The Patient Protection and Affordable Care Act
The Affordable Care Act continues to suck all the oxygen out of the air for our friends at the IRS. Virtually all of the top-level IRS personnel in the exempt organizations tax area, from the Commissioner for Tax-Exempt Organizations and the chief lawyer in the IRS General Counsel’s office for tax-exempt organizations on down have been put on temporary duty to address Affordable Care Act issues on a full-time basis. As a result, IRS activity for tax-exempt health care has basically been limited to the following:
ACOs -- Tax-exempt and unrelated business income tax issues for providers participating in the Medicare Shared Savings Programs through ACOs and the IRS approach to ACOs that attempt the same kinds of activities with commercial insurers;
Guidance regarding new §501(r) of the Tax Code regarding charity care policies, billing and collection, and community health needs assessments; and
Provisions of the Form 990 and Schedule H to the Form 990 that relate to new §501(r) of the Tax Code and the kind of information required regarding new §501(r).
Affordable Care Educational Activities
Our educational efforts have largely tracked the Affordable Care Act in general and the IRS focus on ACOs and new §501(r) in particular. As a part of our efforts, we have actively participated in the AHLA ACO Task Force, where Elizabeth Mills has served as our representative. As to new §501(r), our Practice Corner on the AHLA website has what I believe is the only single-source collection of all public comments to the IRS regarding issues relating to implementation of new §501(r) by the IRS. Our specific educational activities are described below.
Tax Email Alerts
We have issued the following Email Alerts:
IRS Notice on Tax-Exempt Hospitals Participating in ACOs Email Alert - April 4, 2011
2 IRS Delays Form 990 Filing Season for Certain Tax-Exempt Hospitals, Email Alert - February 24, 2011
Federal District Court in Florida Declares Individual Mandate Under the PPACA Unconstitutional, Email Alert - February 1, 2011
Federal District Court Rules That the "Minimum Essential Coverage Provision" of PPACA is Unconstitutional, Email Alert - December 13, 2010
Public Comments on New Section 501(r) Hospital Tax-Exemption Requirements Available on AHLA's Practice Corner, Email Alert - August 30, 2010
Affordable Care Webinars
April 21, 2011, ACO Task Force Webinar, Part II: Quality Measures, Payment Methodology, and Risk Sharing in Medicare’s Shared Savings Program, with T.J. Sullivan from Drinker Biddle representing the Tax & Finance Practice Group.
April 28, 2011, Tax Issues for ACOs, with Elizabeth Mills as the Moderator and a presenter, along with Linda Moroney from Drinker Biddle and Bob Louthian from McDermott Will.
In addition, we have an upcoming “brown bag” teleconference on the portions of the Form 990 and Schedule H that relate to new §501(r), which will take place either on July 13th or July 21st. I will be a panelist along with Steve Clarke from the IRS and two other panelists not yet identified.
AHLA Connections
John Holdenried from Baird Holm is preparing an article on the tax considerations for tax- exempt health care providers that participate in ACOs.
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