Taxation and Tax-Exempt Health Care

Health Care

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Stevens & Lee has assisted numerous health care entities, including hospitals and health systems, continuing care retirement communities, personal care facilities, senior living facilities, family health clinics and nonprofit community-based health care providers in health care finance matters. Our experience with both taxable and tax-exempt debt permits us to advise our clients on the appropriate financing structures to help realize their strategic objectives and to provide guidance regarding ongoing compliance matters.

In addition, our firm’s extensive experience and expertise in the health care sector provides our clients with the added benefit of working with counsel who understand the transaction and its implications for all parties from all perspectives.

We have participated as bond counsel, underwriter’s counsel or hospital/company counsel in over 120 financings in the past decade, including:

  • Served as hospital counsel to a community-based, not-for-profit health care system comprised of three regional hospitals in Pennsylvania and New York in three separate financings to construct a new facility, provide for ongoing capital improvements and to restructure existing debt at more favorable rates and terms
  • Served as corporate counsel and bond counsel to a large regional post-acute care system formed through a combination of five separate corporations in multiple financings to restructure existing debt and fund consolidation, and to provide for capital improvements
  • Served as bond counsel or hospital counsel in more than a dozen separate financings for a regional not-for-profit provider of comprehensive acute care, post-acute rehabilitation, behavioral and occupational health services to fund capital improvements, including the construction of a new regional cancer center
  • Served as bond counsel, obligated group counsel and bank counsel in multiple financings to fund construction of facilities and capital improvements for a not-for-profit, multi-county, multi-facility organization specializing in health care, housing and support services for senior adults
  • Served as bond counsel in multiple financings to fund capital improvements and refinance existing debt for a northeastern Pennsylvania health system comprised of a regional hospital and a skilled nursing facility offering both long term nursing home care and short-term inpatient rehabilitation services
  • Served as special tax counsel in financing the acquisition of a regional cancer research center by a leading academic medical center and hospital system

Recognizing that a large segment of the health care industry consists of tax-exempt organizations, we have extensive experience in advising tax-exempt health care clients, such as Section 501(c)(3) organizations, on a variety of federal income tax matters. Specifically, we have assisted tax-exempt health care systems and their affiliated hospitals, foundations, physician organizations and other affiliates in connection with applying for and obtaining tax-exempt status, avoiding impermissible inurement and private benefit, seeking letter rulings and determinations, reclassifying tax-exempt and public charity status, analyzing unrelated business income tax issues, ensuring compliance with tax-exempt bond requirements, structuring joint ventures with taxable entities, complying with political campaign prohibitions and lobbying limitations, implementing improved governance structures and advising on federal income tax issues generally associated with business transactions, employment arrangements, corporate restructurings, IRS and state and local tax audits, among other areas. Through such representation, our health care attorneys have gained significant experience working in collaboration with officials at the various taxing agencies, including the IRS National Office in Washington D.C., to obtain the best possible results and guidance for our clients.

With the advent of the Affordable Care Act, Section 501(c)(3) hospitals now face additional tax-exemption requirements under Section 501(r) of the Internal Revenue Code, including, among other things, requirements related to community health needs assessments, implementation strategies, financial assistance policies, emergency medical care, charge limitations and billing and collection practices. Our health care attorneys have continuously monitored the ongoing Section 501(r) developments and assisted many clients in connection with such requirements and in structuring compliant policies and procedures.

Franklin_Harriett

Harriet Franklin

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hf@stevenslee.com

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Valley Forge: 610.205.6014

Gritz_Clayton

Clayton Gritz

Associate

cg@stevenslee.com

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Valley Forge: 610.205.6359

Henefer_Tom

E. Thomas Henefer

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eth@stevenslee.com

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Reading: 610.478.2223

Hennessey_Daniel

Daniel J. Hennessey

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djh@stevenslee.com

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Valley Forge: 610.205.6011

Reading: 610.478.2093

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John M. Hogan

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Valley Forge: 610.205.6013

Honart_Charles

Charles M. Honart

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cmh@stevenslee.com

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Valley Forge: 610.205.6017

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Joanne M. Judge

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jmj@stevenslee.com

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Lancaster: 717.209.5866

Reading: 610.478.2226

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Richard J. King

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rjk@stevenslee.com

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Wilmington: 302.425.3303

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Joseph W. “Chip” Marshall, III

Vice Chairman

chip.marshall@stevenslee.com

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Philadelphia: 215.751.1240

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Walter P. McEvilly, Jr.

Of Counsel

wpm@stevenslee.com

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Wilmington: 302.425.3300

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Douglas L. Moak

Associate

dm@stevenslee.com

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Valley Forge: 610.205.6005

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Kirsten McAuliffe Raleigh

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kmr@stevenslee.com

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Valley Forge: 610.205.6015

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Thomas M. Tammany

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tmt@stevenslee.com

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Princeton: 609.987.5339

Valley Forge: 610.205.6342

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Catherine Reese Urban

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cru@stevenslee.com

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Valley Forge: 610.205.6021

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Stephanie A. Wilhelm

Associate

sawi@stevenslee.com

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Valley Forge: 610.205.6022

Wilmington: 302.425.3301

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