AHA: Commercial ACO Tax Ruling hinders Value-Based Care Models

In a letter to the IRS, AHA elaborated that the recent decision to disqualify a commercial ACO from charitable tax exempt status could discourage value-based care for other contributors.

By stripping commercial accountable care organizations (ACOs) of their charitable tax exempt status, the IRS could be threatening the future of value-based care and care coordination, in accordance to the American Hospital Association (AHA).

In a letter addressed to IRS Commissioner John Koskinen, the AHA described that the recent ruling against upholding tax-exempt status for an unnamed ACO was unfounded. Non-Medicare ACOs promote better healthcare for different communities like Medicare Shared Savings Program (MSSP) ACOs and, therefore, deserve a nonprofit, tax-exempt designation.

“We’re seriously concerned that the IRS has adopted a ruling position that means nonprofit hospitals threat losing their tax exemption if they pursue a modern approach to clinically integrated health care that holds the largest promise for improving outcomes and reducing costs,” wrote Melinda Reid Hatton, the AHA’s Senior Vice President and General Counsel.