IRS To Grant 501(c)3 Hospitals Exemption When Donating EHR Enabling Devices

An Internal Revenue Service (IRS) memo released this week outlined specific protections for hospitals that provide physicians who have staff privileges with financial assistance to acquire and implement software that is used predominantly for creating, maintaining, transmitting, or receiving electronic health records (EHRs). 

The IRS said in its memo that we will not treat the benefits a hospital provides to its medical staff physicians as impermissible private benefit or inurement in violation of section 501(c)(3) of the Code if the benefits fall within the range of Health IT Items and Services that are permissible under the (August 8, 2006) HHS EHR regulations and if hospitals adhere to specific parameters such as making available subsidized IT software to all employed physicians at any given hospital and applying subsidies equally to all employed physicians, or alternatively on a scale based on meeting the health needs of a specific community

This directive is helpful to those in the healthcare industry who previously had sought clarification about the IRS's potential view of actions taken under the new HHS regulations which allow hospitals to provide EHR software and technical support services to their medical staff physicians without violating the federal anti-kickback law and physician self-referral law.