IRS Issues Guidance on Hospital-Physician
May 2007
Electronic Health Record Arrangements
The Director, Exempt Organizations has issued a directive for handling examination and exemption application cases involving hospitals that provide staff physicians with financial assistance to acquire and implement the use of electronic health records software.
The IRS memorandum essentially provides that, if hospitals structure electronic health records (EHR) arrangements on a subsidized basis consistent with the U.S. Department of Health and Human Services (HHS) final regulations, such arrangements will not result in impermissible private benefit or inurement, provided that:
- The arrangements require both the hospital and the participating physicians to comply with the HHS final regulations on an ongoing basis;
- The hospital is able to access medical records created by physicians pursuant to the subsidized EHR arrangement to the extent permitted by law;
- The hospital makes the subsidized EHR software and services available to all physicians on its medical staff; and
- The hospital provides the same level of subsidy to all medical staff physicians, or the hospital varies the subsidy level by applying criteria related to meeting community healthcare needs.
Author: Ginny Striegel is a tax director based in RSM McGladrey's Des Moines office and works exclusively with tax-exempt clients across the country. If you have any questions regarding the information in this article, please contact Striegel at 515.281.9272 or ginny.striegel@rsmi.com.
