In a recent ruling, the Internal Revenue Service denied an accountable care organization a tax exemption, leading many to question if the ruling will pose barriers to other ACOs, according to The New York Times.
Here are four highlights:
1. The IRS argued the ACO failed to meet tax-exempt status as the ACO did not operate exclusively for charitable purposes. The IRS also claimed the ACO gave some physicians in its network private benefits.
2. The ruling will specifically affect those ACOs providing care to privately insured patients, rather than ACOs participating in Medicare.
3. American Hospital Association Senior Vice President and General Counsel Melinda R. Hatton said the ruling poses a "serious obstacle for nonprofit hospitals striving to coordinate care for their communities."
4. While the IRS says the specific ACO was putting forth efforts to enhance quality of care and reduce costs, the IRS made its decision because the organization allegedly negotiated agreements with payers on behalf of its physicians.
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