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The BNA Health Care Policy Report ($$ Subscription) tells us that Steven Grodnitzky, a manager in the IRS exempt organization division recently said that they are

starting to look into the globalization of U.S. health care systems and the tax ramifications for exempt systems that provide advisory services to foreign governments, mostly in the Middle East, to help them construct, establish, and operate new state-of-the-art hospitals and health care facilities, he said.

Some of these exempt health care systems have created subsidiaries that are paid fees to provide these services, he noted. The organization does not own, operate, or control the foreign operation, its role being rather to help get these foreign operations up and running by providing advice, expertise, and training, he added.

As with other exempt entities, the issues are whether these subsidiaries are really charitable and whether they are promoting public health or educational purposes. “This is an area we are starting to see and hear about,” he said.