Community Health Needs Assessment (CHNA)

Key facts

Legal basis

Internal Revenue Code Section 501(r)(3), added by the Affordable Care Act

Applies to

Each hospital facility operated by a 501(c)(3) hospital organization

Frequency

At least once every three taxable years

Penalty

$50,000 excise tax per facility per year under Section 4959

Reported on

IRS Form 990, Schedule H

What is a Community Health Needs Assessment?

The Affordable Care Act added Section 501(r) to the Internal Revenue Code, setting extra requirements that charitable hospitals must meet to keep their tax exemption. One of them is the Community Health Needs Assessment: a structured review of the health needs of the community each hospital facility serves.

The requirement applies facility by facility. A hospital organization that runs several hospitals must meet it for each one, although facilities can collaborate on a joint assessment.

What a CHNA must include

Under the Section 501(r)(3) rules, a hospital facility must:

• Define the community it serves and assess that community's significant health needs.
• Take into account input from people who represent the broad interests of the community, including those with public health expertise.
• Prioritize the significant needs and describe resources available to address them.
• Evaluate the impact of actions taken since the previous CHNA.
• Make the CHNA report widely available, including on a website.
• Adopt a written implementation strategy describing how it will address each significant need, or why it will not.

Why CHNAs matter

Published CHNA reports are free, local needs analyses with a consistent structure, covering issues such as behavioral health, chronic disease, access to primary care and social needs. Commercial teams use them to understand local priorities before approaching a health system. Consultants and policy analysts compare implementation strategies with Schedule H community benefit spending to judge whether stated priorities are funded.

CHNA vs community health assessment

A hospital CHNA is a federal tax law requirement. State and local health departments conduct a similar exercise, usually called a community health assessment, followed by a community health improvement plan, often as part of public health accreditation. The two are frequently done together, but they have different legal bases, timelines and required contents.