e Ownership interests in the Independent Practice Association are sold to physic

Question

e Ownership interests in the Independent Practice Association are sold to physicians in exchange for start-up capital e Aand C are both true. DQuestion 13 2.5 pts In order for a not for proft hospital to retain its tax exempt status it cannot do which of the following Operate for charitable purposes Show that it prowides an overall benefit to the community Ereage in the practice of patient dumping Have physicians or its board of directors Question 14 2.5 pts The Balanced Budiret Act passed by Congress in 1997 increased reimbursement for healthcare providers

Explanation / Answer

The answer is d, having physicians on its board of directors.

To be qualified for IT exemptiom, the organization has to face two test, viz. Organizational and Operational. Under organizational tests, one of the criteria is not to have shareholders who will subject to residual claims on firm's income and/or cannot operate for private affair of thrthr interested party. This restriction of NFP hospitals imply that thry cannot transfer profits to physicians ot directors via any sort of excessive compensation.

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