IRS weighs in on donations of information technology issue

A recent memo from the Internal Revenue Service offered information for not-for-profit hospitals considering providing healthcare information technology to medical staff physicians. The IRS has indicated that it would not consider donations of IT and supporting services as kickbacks that would jeopardize healthcare providers’ not-for-profit status. The IRS memorandum defines medical staff as those who have staff privileges at a hospital. The ruling answers questions about the tax status of a facility that provides “financial assistance to acquire and implement software that is used primarily for creating, maintaining, transmitting or receiving electronic health records for their patients.” The IRS response was sought after the Aug. 8, 2006, decision by the Department of Health and Human Services to issue regulations enabling hospitals to provide software and services, within specific parameters, for staff physicians without violating federal anti-kickback laws. “We will not treat the benefits a hospital provides to its medical staff physicians as impermissible private benefits or inurement in violation of section 501(c)(3) of the Internal Revenue Code if the benefits fall within the range of health IT items and services that are permissible under the HHS EHR regulations,” the memorandum stated before providing some general guidelines for operations.

To read the IRS memo go to http://www.aha.org/aha/content/2007/pdf/070511-irsmemo.pdf