This is part 9 of our 10-part checklist to make sure your charitable hospital can remain tax-exempt. Today’s topic concerns notifying the CEO and board of directors of your financial assistance policies and procedures.
While it’s true that most of the implementation, and everyday, boots-on-the-ground work will be handled by operational personnel, the board of directors and C-level personnel also need to be completely on board. Let’s take a look at how that works.
Alert Board Members To Their Changing Roles
The board members of charitable hospitals will need to be notified as soon as possible about the ways in which 501(r) regulations will affect them. Their decisions regarding hospital policy will also need to be in compliance, or else they could inadvertently enact policies and procedures which threaten the hospital’s tax-exempt status. The board of directors will be more effective decision makers when they understand their new roles.
Educate Board Members About 501(r) Regulations
Board members will need to be made aware of the new rules regarding financial assistance policy notifications, and extraordinary collections actions. One of their most important considerations from here on out will be keeping the hospital tax-exempt, and they need to be educated on how to do that. Provide the board of directors with educational materials as well as in-person instruction when possible.
Designate A 501(r) Compliance Team
The hospital CEO will likely want to designate not only a compliance officer, but also establish a clear chain of command. As policy changes are enacted, there are likely going to be some growing pains, and employees will need to know who to turn to when they encounter issues. The lead compliance officer may well be a C-level employee such as the COO or CFO, but that person will also need considerable support staff. Make sure the board of directors has appointed sufficient staff to the 501(r) compliance team, so that operations can keep running smoothly.
It is important that the hospital superiors and board of directors be on the same page when implementing policy changes, but it is also important that operational staff understand these changes too. If your charitable hospital is struggling to fit all these puzzle pieces together, take a look at our free 10-point checklist. We outline everything you need to know about maintaining your tax-exempt status.