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MedPAC Releases its Annual Medicare Payment Policy Report to Congress

On March 15, 2011, the Medicare Payment Advisory Commission (the “Commission”) issued its annual Medicare Payment Policy report (the “Report”) to Congress. The focus of the Report is the Commission’s recommendations for annual rate adjustments under Medicare’s fee-for-service (“FFS”) payment systems. The report includes payment policy recommendations for ten payment systems: inpatient hospitals, outpatient hospitals, physician and other health professional services, ambulatory surgical centers, outpatient dialysis, skilled nursing facility services, home health services, inpatient rehabilitation facility services, long-term care hospitals, and hospice. The Commission concluded that payment adequacy indicators were positive for ambulatory surgical centers, outpatient dialysis services, inpatient rehabilitation facility services, long term care hospitals, and hospice.   Click here for a copy of the entire Alert.

Providers and Suppliers Burdened by New CMS Enrollment Requirements

 On February 2, 2011, the Centers for Medicare and Medicaid Services (“CMS”) issued final rules which dramatically change how providers and suppliers (including tax-exempt organizations) enroll with Medicare. The new regulations, intended to carry out various provisions of the Patient Protection and Affordable Care Act (“PPACA”), greatly expand the reach of the enrollment requirements which were first proposed by CMS on September 22, 2010, and signify CMS’ focus on preventing fraud and abuse before it begins.  Click here for a copy of the entire Alert.

Proposed Regulations Regarding State Inspection of IRS Records

March 20, 2011

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The IRS released Proposed Regulations (which may be obtained by clicking here) that provide guidance to states regarding the process by which they may obtain or inspect certain returns and return information (including information about final and proposed denials and revocations of tax-exempt status) for the purpose of administering state laws governing certain tax-exempt organizations and their activities.  The Proposed Regulations provide that those state organizations who meet cetain safeguard and procedural requirements may receive information from IRS to be used in the administration of state laws governing charitable organizations, charitable solicitation, and administration of charitable funds. The information available under the Proposed Regulations is greater in scope than what was available under former Code Sec. 6104(c) and it comes at an earlier stage in IRS’s administrative and enforcement processes.

Nonmember Income and 501(c)(7) Social Clubs

March 15, 2011

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Social clubs may be exempt from federal income taxation if they meet the requirements of Section 501(c)(7) of the Code.   Although social clubs are generally exempt from tax, theyare subject to tax on their unrelated business income which generally includes all income from non-members.   In addition, a social club may lose its exempt status if it receives too much unrelated income.  The IRS has released a new chart and other new web content on tax issues of social clubs. Social clubs may click here to review this material and confirm how nonmember/nontraditional income may affect the tax-exempt status of a social club under Section 501(c)(7).

Donor-Advised Funds

Donor-Advised Funds

March 9, 2011

Authored by: Nathan Boyce

In general, a donor-advised fund exists when the following three criteria exist:

1. the fund is owned and controlled by a public charity; 2. the fund is separately identified by reference to contributions of a donor or donors 3. a donor has, or reasonably expects to have, advisory privileges with respect to the distribution or investment of amounts from the fund

A key to the third point is that the public charity will consider the advice of the donor, but the public charity itself controls all distributions.

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