Strategies can enhance rural hospital viability.

Although some rural hospitals struggle to remain financially viable, the Internal Revenue Service (IRS) often shows greater flexibility in interpreting regulations for tax-exempt hospitals in rural areas. To take advantage of this flexibility, rural facilities should understand issues affecting Federal tax-exempt status, such as private benefit, private inurement, and unrelated business income. A not-for-profit, rural healthcare facility well versed in tax-exempt regulations and their interpretations by the IRS can structure recruitment and retention programs, joint ventures, unrelated businesses, and even cooperative coalitions to enhance its financial well-being without endangering its tax exemption.