Challenges to the nonprofit status of hospitals and health systems are becoming increasingly common, with attacks coming from multiple fronts. Many nonprofit hospitals and health systems are facing litigation, the results of which could be very costly.
Different levels of government require different compliance for hospitals to maintain their tax-exempt status. Federal, state and local municipalities all place requirements on nonprofit hospitals and health systems. Also, the IRS has increased enforcement efforts on ensuring that hospitals claiming tax-exempt status are qualified.
Hospitals, health systems and their counsel should be aware of, and prepare for these nonprofit tax-exempt challenges at the local, state and federal level, including establishing the reasonableness of compensation amounts for hospital executives and physicians.
Our panel will guide counsel for nonprofit hospitals and health systems on proactive measures to protect the hospital’s tax-exempt status. The panel will review current litigation between municipalities and nonprofit hospitals as well as legislative challenges. The panel will also discuss how hospitals and healthcare systems can mitigate those challenges and ensure compliance to maintain nonprofit status.
This presentation will review:
- How is the IRS increasing enforcement efforts? What actions are municipalities and states taking toward nonprofit hospitals and health systems?
- How can nonprofit hospitals mitigate challenges to their tax-exempt status?
- What steps should hospitals take to ensure compliance with local, state and federal law requirements and avoid government penalties or civil liability?
Sydney Hilzenrath is a Partner in the Philadelphia office.
Hilzenrath assists clients in evaluating the appropriateness and enhancing the effectiveness of compensation programs in the context of organization strategy, emerging trends of corporate governance and the perspectives of stakeholders, investors and proxy advisors. Her consulting experience covers a broad range of for- and not-for-profit organizations including healthcare, biopharmaceuticals, insurance (property & casualty and healthcare), consumer products, retail, industrial manufacturing, transportation, and utilities.
Hilzenrath has over 14 years of consulting experience specializing in executive and board compensation, and her areas of expertise include Executive and Board of Directors compensation benchmarking, short-term and long-term incentive plan design, pay-for-performance alignment, employment and severance agreement evaluation and design, and special pay arrangements. Prior to joining HealthCare Appraisers, Ms. Hilzenrath was a consultant in Korn Ferry’s Executive Pay & Governance practice.
Marie K. McConnell is a shareholder and Chair of the Firm’s Corporate, Business & Banking Group. Her practice focuses on commercial transactions, including commercial real estate acquisitions and sales, entity restructures, charter schools, for-profit and nonprofit mergers and acquisitions and organizational issues. She also has significant experience in counseling clients with respect to tax exemptions and tax assessment appeals.
Ms. McConnell merges an undergraduate background in economics and an LL.M. in taxation into her legal practice, resulting in thoughtful, business-oriented solutions that fit each client’s goals. She is a trusted advisor to her clients and values the personal relationships she has built over the years. She is dedicated, driven and highly responsive.
Ms. McConnell brings the same passion with which she serves her clients to the Firm and the Lehigh Valley community. She has been a member of the Firm’s Executive Committee beginning in 2019, the Compensation Committee since 2017, the Human Resources Committee since 2016, the Marketing Committee since 2015 and the Finance Committee since 2014. She was honored by the Greater Lehigh Valley Chamber of Commerce as the inaugural “Future Business Leader of the Lehigh Valley” in 2013. In addition, her peers recognized her as a “Pennsylvania Rising Star” each year since 2012, a designation awarded to only 2.5% of attorneys under 40. She has been active in CREW Lehigh Valley since 2010 and is currently servings as the organization’s President-Elect.