A signed §501(r) Compliance File — the exemption question answered, facility by facility.
Send your current FAP/EMCP, prior CHNA, remittance data, and most recent Schedule H. FacilityFile extracts and reconciles the data, runs a Requirement Diff against all six §501(r) requirements, computes your AGB Workpaper, and drafts every artifact — then a Compliance Analyst checks it, a TEO Attorney signs the compliance determination, and a Healthcare CPA signs the AGB and Schedule H representation. Flat fee per facility — never hourly, never a percentage of hospital revenue.
No cost, no obligation, no data-sharing required. A Compliance Analyst checks every file for completeness before it ever reaches the TEO Attorney or Healthcare CPA — AI never signs a determination, and never files anything.
Twelve facilities means twelve CHNA clocks, twelve FAP suites, and one exemption on the line.
Under §501(r), a nonprofit hospital keeps its exemption only if every one of its facilities independently satisfies four requirements — every year, on top of an already-stretched finance team's regular accounting workload. A standalone hospital with no in-house tax-exempt counsel and a multi-facility system tracking staggered CHNA clocks face the same underlying problem: the disclosure and policy suite gets rebuilt from a stale prior-year template instead of current data.
The CHNA deadline doesn't move
A missed Community Health Needs Assessment or unadopted Implementation Strategy triggers a $50,000 excise tax per facility, per year — a statutory penalty, not a fine that can be negotiated away.
A live IRS examination wave
The IRS opened a "widespread and wide-ranging" hospital examination program; roughly 35 organizations were under active §501(r) examination by late 2024, on top of the statutory triennial review every facility already faces.
"Are we exposed?"
When a board or auditor asks whether every facility is actually compliant across all six requirements, the honest answer requires a TEO Attorney's signed determination — not a guess from a stale spreadsheet.
Getting this wrong has real consequences: the IRS has already revoked at least one hospital's exemption over a §501(r)/community-benefit failure, and a September 2025 House Ways & Means hearing put the roughly $37.4B annual value of the nonprofit-hospital tax exemption under direct Congressional scrutiny. FacilityFile does not provide legal advice and does not determine on its own authority whether any specific facility is compliant; the TEO Attorney's signed determination is the only party of record on that question.
Every §501(r) Compliance File is measured against the same federal checklist.
The Requirement Diff checks a facility's current artifacts against the exact CFR text — not a paraphrase — and cites the specific subsection on every finding.
Community Health Needs Assessment
Triennial assessment with documented community input, a written public report, and a board-adopted implementation strategy.
Financial Assistance & Emergency Care Policy
A written FAP and EMCP stating eligibility criteria, the AGB-based charge limit, and application methods — widely publicized, in the community's required languages.
Limitation on charges (AGB)
Amounts Generally Billed to FAP-eligible patients, recalculated at least annually from allowed-claims data, with the FAP updated whenever the method changes.
Billing and collections
Reasonable efforts to determine FAP-eligibility before any extraordinary collection action — the requirement most closely tied to a patient's own experience, though the compliance work itself belongs to the facility, not to any individual patient's case.
Consequence of non-compliance
A missed CHNA is a $50,000 excise tax per facility per year; broader failure risks taxation of the facility's income and revocation of §501(c)(3) status.
Annual reporting
The Schedule H Narrative discloses §501(r) compliance to the IRS and the public every year — the document an examiner reads first.
One filing engagement, one signed file, always a flat fee.
The same terms, every time: Facility, Compliance File, TEO Attorney, Healthcare CPA, AGB Workpaper, CHNA Package.
Facility Readiness Scan
The lead diagnostic. Built from your facility's public Form 990/Schedule H and posted FAP/CHNA — a gap read against all six requirements within 3 business days.
Compliance Audit & Correction File
The one-time MVP engagement: full Requirement Diff, corrected FAP/EMCP suite, AGB Workpaper, and Schedule H Narrative. Per facility.
Annual Compliance File subscription
Yearly FAP/AGB/billing maintenance, translations, and Schedule H Narrative refresh. Per facility, per year.
CHNA Package
Triennial Community Health Needs Assessment and board-adoptable Implementation Strategy. Per facility, per cycle.
Remediation & Defense
For a facility behind schedule or under active IRS examination — a gap-closure file plus a TEO Attorney-led correction-and-disclosure strategy.
AI extracts, computes, and drafts. A TEO Attorney and a Healthcare CPA decide. Every time.
Nothing reaches your board or an examiner without a Compliance Analyst's completeness check, and no determination is ever signed by AI or by FacilityFile staff.
Intake & normalize
Your current FAP/EMCP/billing policy, prior CHNA, most recent Schedule H, and 12 months of allowed-claims remittance data are collected and checked against the intake checklist — no engagement proceeds with a missing required field.
Requirement Diff
AI compares each artifact to the 26 CFR 1.501(r) checklist, requirement by requirement, and flags omissions with the exact CFR citation.
AGB compute
AI calculates the AGB percentage from your allowed-claims data and checks it against your FAP's stated method — plus applicable state charity-care overlays.
Draft artifacts
AI drafts the corrected FAP/EMCP/billing policy, plain-language summaries and translations, the CHNA Package content, and the Schedule H Narrative.
QA & red-team
A two-model cross-check, independent AGB recomputation, CFR citation-back on every finding, and an examiner red-team pass ("what would IRM 4.70.1 flag?").
TEO Attorney signs the determination — the chokepoint
The independently engaged TEO Attorney reviews and signs the §501(r) compliance determination and any correction-and-disclosure strategy. Neither AI nor FacilityFile staff may perform this step.
Healthcare CPA signs the numbers — the second chokepoint
The independently engaged Healthcare CPA reviews and signs the AGB Workpaper and the Schedule H representation your facility relies on for its Form 990.
Deliver & renew
The signed Compliance File, publication-evidence pack, and board-ready summary are delivered to you. CHNA clocks and annual AGB recalculation dates are tracked ahead of your next cycle.
Per facility, per cycle. Never hourly, never a percentage of hospital revenue.
Pricing is deliberately fixed — never a percentage of net patient revenue, reserves, or any recovered dollar amount. That structure would misalign incentives for a service whose purpose is protecting the exemption, not extracting a share of hospital revenue.
Full Requirement Diff, corrected FAP/EMCP suite, AGB Workpaper, Schedule H Narrative.
Flat fee — quoted before you engage.Yearly FAP/AGB/billing maintenance, translations, Schedule H refresh.
Flat fee — never a percentage of revenue.Community Health Needs Assessment and board-adoptable Implementation Strategy.
Amortizes to roughly $7,000–$15,000/yr.Gap-closure file plus a TEO Attorney-led correction-and-disclosure strategy.
Fixed per matter — disclosed up front.System Portfolio bundles (5+ facilities) receive a 25–40% volume discount off the per-facility Annual Compliance File rate. All figures above are current pricing ranges, not a guarantee of your facility's exact quote — final pricing is confirmed after your free Facility Readiness Scan, before you engage. FacilityFile never guarantees that any specific facility "will pass" an IRS examination.
What we can show you honestly, right now.
FacilityFile is entering its pilot cohort, hard-capped at 5 facilities. We're not going to invent a case study to fill this space.
The first signed-file case study will appear here once the initial pilot cohort completes and outcomes are logged. The delivery-cycle figures cited above are targets built into the engagement design, not guarantees, and are labeled Unverified against real-engagement data until measured.
The questions every hospital finance leader asks before engaging.
Do you replace our attorney or our auditor?
Who actually signs the compliance determination?
Who signs the AGB calculation and Schedule H representation?
Do you help individual patients with a bill or a financial-assistance application?
What data do you need from us?
How fast is delivery?
The licensing boundary and the service boundary, stated plainly.
"FacilityFile does not provide legal advice, does not represent itself as a law firm, and does not collect consumer/personal debt under any circumstance."
"FacilityFile serves nonprofit hospitals and health systems as institutional clients on their §501(r) tax-exemption compliance. It does not advise individual patients, does not determine any individual patient's financial-assistance eligibility, and is not a party to any patient billing dispute."
These two sentences are used, unmodified, on this page, in every engagement letter, and in any public content that discusses licensing or legal scope. What AI may do: extract and normalize policy and remittance data; run the Requirement Diff against the 26 CFR 1.501(r) checklist; compute the AGB Workpaper; draft the corrected FAP/EMCP/billing policy, translations, and Schedule H Narrative; aggregate CHNA secondary data; monitor state charity-care statutes for changes. What a Compliance Analyst may do: intake, review AI-assembled artifacts for completeness and internal consistency, confirm the correct current overlay entry, validate CHNA community-input representativeness, and manage facility correspondence. What only a TEO Attorney may do: sign the §501(r) compliance determination and any correction-and-disclosure strategy — never AI, never FacilityFile staff. What only a Healthcare CPA may do: sign the AGB Workpaper and the Schedule H representation — never AI, never FacilityFile staff. This page is not legal advice and not a substitute for review by counsel; §501(r) federal requirements and state charity-care overlays vary and change; consult qualified counsel and your engaged TEO Attorney and Healthcare CPA before relying on any of it operationally.
Get your free Facility Readiness Scan.
Tell us your facility's name and state. We'll build a gap read from your public Form 990/Schedule H and posted FAP/CHNA against all six §501(r) requirements — within 3 business days, no cost, no obligation, no data-sharing required to receive it.
Free, no obligation, no data-sharing required. A Compliance Analyst reviews every submission personally — this form does not commit you to any engagement.