The Affordable Care Act and State Charities Regulators

The Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”) was enacted almost three years ago in March 2010. Certain of its provisions became effective shortly after enactment, and others have been ramping up in advance of the full implementation of most of the remaining provisions of the Affordable Care Act on January 1, 2014. The Affordable Care Act is probably one of, if not the most, comprehensive reform of the healthcare sector, which represents the largest percentage of this nation’s gross domestic product. Because of the extent of the reforms, the depth of impact on the entire healthcare system, and the costs and increased revenues associated with the Affordable Care Act, numerous challenges will be presented to state charities regulators as implementation of the Affordable Care Act continues to take place. This paper will focus on the intersection between the federal healthcare reforms enacted as part of the Affordable Care Act and state charities regulators. Part II discusses the duty of care and oversight issues concerning compliance with the new section 501(r) requirements applicable to nonprofit and governmental hospitals that are or seek tax exemption under section 501(c)(3). Part III focuses on the dynamics of a consolidating marketplace for hospitals and health systems and the expected mergers, acquisitions and other transactions that are taking place and will take place in the coming years in response to or as a result of the law changes contained in the Affordable Care Act. Finally, with the increased funding that will result from full implementation of the Affordable Care Act, there will be greater competition for an increasingly scarce commodity – physicians. Part IV discusses how nonprofit hospitals may be compelled to push the limits of the anti-kickback and self-referral laws, thereby creating financial exposures for the hospitals and concomitant questions about compliance with fiduciary duties of oversight as the Delaware Supreme Court spelled out in the CareMark litigation

Angiostatin anti-angiogenesis requires IL-12: The innate immune system as a key target

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PROFESSIONAL ADVISORS CAN OFFER PRUDENT ADVICE AND SHAPE RESPONSIBLE TAX POLICY ON TAX SHELTERS

The bad news is that exempt entities are squarely involved in tax shelters and the controversies over them. This bad news has important implications for exempt organizations, their managers and board members, and their professional advisors. Shelters are identified not by core principles but by transactional indicia. One of the central indicia of a tax shelter is the presence of a tax-indifferent party, including various types of exempt entities. Abuse of the Section 170 charitable contribution deduction rests on the time-honored expedient of over-valuing tangible and intangible property contributed to section 501(c)(3) organizations. These shelters thus involve two elements - valuation and a charitable donee operating as an accommodation party. In addition to exemption from taxation, exempt organizations seem to offer some insulation from nettlesome questions about the business purpose for the transfer to the exempt entity and the legitimacy of the larger transaction. Congress has enacted a range of penalties applicable to parties to tax shelters, including the managers and professional advisers of exempt entities serving as tax-indifferent accommodation parties

Taxation of Exempt Organizations

Exempt organizations make up a large and growing part of the economy, and the rules that govern their activities are becoming increasingly complex. Taxation of Exempt Organizations provides expert analysis and tax guidance on the federal taxation, fundraising, and other activities of those organizations recognized as exempt under federal law. In addition, it contains citations to virtually all relevant cases, revenue rulings, significant private letter rulings, technical advice memoranda, continuing professional education texts, and related materials