Table of Contents
- Part I. Financial Assistance and Certain Other Community Benefits at Cost
- Optional Worksheets for Part I, Line 7 (Financial Assistance and Certain Other Community Benefits At Cost)
- Part II. Community Building Activities
- Part III. Bad Debt, Medicare, & Collection Practices
- Line 1.
- Line 2.
- Line 3.
- Section B.
- Part IV. Management Companies and Joint Ventures Owned 10% or More by Officers, Directors, Trustees, Key Employees, and Physicians
- Part V. Facility Information
- Part VI. Supplemental Information
- Worksheet 1. Financial Assistance at Cost (Part I, Line 7a)
- Worksheet 2. Ratio of Patient Care Cost to Charges
- Worksheet 3. Medicaid and Other Means-Tested Government Health Programs (Part I, Lines 7b and 7c)
- Worksheet 4. Community Health Improvement Services and Community Benefit Operations (Part I, Line 7e)
- Worksheet 5. Health Professions Education (Part I, Line 7f)
- Worksheet 6. Subsidized Health Services (Part I, Line 7g)
- Worksheet 7. Research (Part I, Line 7h)
- Worksheet 8. Cash and In-Kind Contributions for Community Benefit (Part I, Line 7i)
Part I requires reporting of financial assistance policies, the availability of community benefit reports, and the cost of financial assistance and other community benefit activities and programs. Worksheets and accompanying instructions are provided at the end of the instructions to this schedule to assist in completing the table in Part I, line 7.
“Federal Poverty Guidelines” (FPG) are the Federal Poverty Guidelines published annually by the U.S. Department of Health and Human Services. If the organization has established a family or household income threshold that a patient must meet or fall below to qualify for free medical care, check the box in the “Yes” column and indicate the specific threshold by checking the appropriate box. For instance, if a patient's family or household income must be less than or equal to 250% of FPG for the patient to qualify for free care, then check the box marked “Other” and enter “250%.”
If the organization has established a family or household income threshold that a patient must meet or fall below to qualify for discounted medical care, check the box in the “Yes” column and indicate the specific threshold by checking the appropriate box.
If applicable, describe the other criteria used, such as asset test or other means test or threshold for free or discounted care, in Part VI, line 1 of this schedule. An “asset test” includes (i) a limit on the amount of total or liquid assets that a patient or the patient's family or household can own for the patient to qualify for free or discounted care, and/or (ii) a criterion for determining the level of discounted medical care patients can receive, depending on the amount of assets that they and/or their families or households own.
Answer “Yes,” if the organization established or had in place at any time during the tax year an annual or periodic budgeted amount of free or discounted care to be provided under its financial assistance policy. If “No,” skip to line 6a.
Answer “Yes,” if the free or discounted care the organization provided in the applicable period exceeded the budgeted amount of costs or charges for that period. If “No,” skip to line 6a.
Answer “Yes,” if the organization denied financial assistance to any patient eligible for free or discounted care under its financial assistance policy or under any of its hospital facilities' financial assistance policies solely because the organization's or the facility's financial assistance budget was exceeded.
Answer “Yes” if the organization prepared a written report during the tax year that describes the organization's programs and services that promote the health of the community or communities served by the organization. If the organization's community benefit report is contained in a report prepared by a related organization, answer “Yes” and identify the related organization in Part VI, line 1. If “No,” skip to line 7.
Answer “Yes” if the organization made the community benefit report it prepared during the tax year available to the public.
“Number of activities or programs” means the number of the organization's activities or programs conducted during the year that involve the community benefit reported on the line. Report each activity and program on only one line so that it is not counted more than once. Reporting in this column is optional.
“Persons served” means the number of patient contacts or encounters in accordance with the filing organization's records. Persons served can be reported in multiple rows, as services across different categories may be provided to the same patient. Reporting in this column is optional.
“Total community benefit expense” means the total gross expense of the activity incurred during the year, calculated by using the pertinent worksheets for each line item. “Total community benefit expense” includes both “direct costs” and “indirect costs.” "Direct costs" means salaries and benefits, supplies, and other expenses directly related to the actual conduct of each activity or program. “Indirect costs” means costs that are shared by multiple activities or programs, such as facilities and administrative costs related to the organization's infrastructure (space, utilities, custodial services, security, information systems, administration, materials management, and others).
The organization receives a restricted grant from an unrelated organization that must be used by the organization to provide financial assistance. The amount of the restricted grant is reportable as direct offsetting revenue on line 7a, column (d).
The organization receives an unrestricted grant from an unrelated organization. The organization decides to use the grant to increase the amount of financial assistance it provides. The amount of the unrestricted grant is not reportable as direct offsetting revenue on line 7a, column (d).
Columns (e) and (f). Do not report negative numbers. If the net community benefit expense is less than $0, enter “0.” Similarly, do not report a negative percent in column (f), but enter “0.”
Group return filers. The “total expense” denominator for purposes of determining the percent of total expense for column (f) is the amount reported on Form 990, Part IX, line 25, column (A) of the group return.
Worksheets 1 through 8 are intended to assist the organization in completing Schedule H (Form 990), Part I, lines 7a through 7k. Use of the worksheets is not required and they should not be filed with Form 990. The organization can use alternative equivalent documentation, provided that the methodology described in these instructions (including the instructions to the worksheets) is followed. Regardless of whether the worksheets or alternative equivalent documentation is used to compile and report the required information, such documentation must be retained by the organization to substantiate the information reported on Schedule H (Form 990). The worksheets or alternative equivalent documentation are to be completed using the organization's most accurate costing methodology, which can include a cost accounting system, cost-to-charge ratios, a combination thereof, or some other method.
If the organization is filing a group return or has a disregarded entity or an ownership interest in one or more joint ventures, the organization may find it helpful to complete the worksheets separately for the organization and for each disregarded entity, joint venture in which the organization had an ownership interest during the tax year, and group affiliate. In that case, the organization should combine all information from the worksheets for purposes of completing line 7. Complete the table by combining amounts from the organization's worksheets, amounts from disregarded entities or group affiliates, and amounts from joint ventures that are attributable to the organization's proportionate share of each joint venture, under the aggregation instruction in Purpose of Schedule.
See Worksheets 1 through 8 and specific instructions for the worksheets later in these instructions.
Report in this part the costs of the organization's activities that it engaged in during the tax year to protect or improve the community's health or safety, and that are not reportable in Part I of this schedule. Some community building activities may also meet the definition of community benefit. Do not report in Part II community building costs that are reported on Part I, line 7 as community benefit (costs of a community health improvement service reportable on Part I, line 7e). An organization that reports information in this Part II must describe in Part VI how its community building activities promote the health of the communities it serves.
If the filing organization makes a grant to an organization to be used to accomplish one of the community building activities listed in this part, then the organization should include the amount of the grant on the appropriate line in Part II. If the organization makes a grant to a joint venture in which it has an ownership interest to be used to accomplish one of the community building activities listed in this part, report the grant on the appropriate line in Part II, but do not include in Part II the organization's proportionate share of the amount spent by the joint venture on such activities, to avoid double counting.
Indicate if the organization reports bad debt expense in accordance with Statement 15.
Statement 15 has not been adopted by the AICPA. The IRS does not require organizations to adopt Statement 15 or use it to determine bad debt expense or financial assistance costs. Some organizations may rely on Statement 15 in reporting bad debt expense and financial assistance in their audited financial statements. Statement 15 provides instructions for recordkeeping, valuation, and disclosure for bad debts.
Use the most accurate system and methodology available to the organization to report bad debt expense. If only a portion of a patient's bill for services is written off as a bad debt, include only the proportionate amount attributable to the bad debt. Include the organization's proportionate share of the bad debt expense of joint ventures in which it had an ownership interest during the tax year.
Describe in Part VI the methodology used in determining the amount reported on line 2 as bad debt, including how the organization accounted for discounts and payments on patient accounts in determining bad debt expense.
Provide an estimate of the amount of bad debt reported on line 2 that reasonably is attributable to patients who likely would qualify for financial assistance under the hospital's financial assistance policy as reported in Part I, lines 1 through 4, but for whom insufficient information was obtained to determine their eligibility. Do not include this amount in Part I, line 7. Organizations can use any reasonable methodology to estimate this amount, such as record reviews, an assessment of financial assistance applications that were denied due to incomplete documentation, analysis of demographics, or other analytical methods.
Describe in Part VI the methodology used to determine the amount reported on line 3 and the rationale, if any, for including any portion of bad debt as community benefit.
In Part VI, provide the footnote from the organization's audited financial statements on bad debt expense, if applicable, or the footnotes related to “accounts receivable,” "allowance for doubtful accounts," or similar designations. Alternatively, report the page number(s) on which the footnote or footnotes appear in the organization's most recent audited financial statements, which must be attached to this return. If the footnote or footnotes address only the filing organization's bad debt expense or “accounts receivable,” "allowance for doubtful accounts," or similar designations, provide the exact wording of the footnote or footnotes, or report the page number(s) in which the footnote or footnotes appear in the attached audited financial statements.
If the organization's financial statements include a footnote on these issues that also includes other information, report in Part VI only the relevant portions of the footnote. If the organization is a member of a group with consolidated financial statements, the organization can summarize that portion, if any, of the footnote or footnotes that apply. If the organization's financial statements do not include a footnote that discusses bad debt expense, “accounts receivable,” "allowance for doubtful accounts," or similar designations, include a statement in Part VI that the organization's audited financial statements do not include a footnote discussing these issues and explain how the organization's financial statements account for bad debt, if at all.
In this section, (a) combine allowable costs to provide services reimbursed by Medicare, (do not include community benefit costs included in Part I, line 7), (b) combine Medicare reimbursements attributable to such costs, and (c) combine Medicare surplus or shortfall. Include in Section B only those allowable costs and Medicare reimbursements that are reported in the organization's Medicare Cost Report(s) for the year, including its share of any such allowable costs and reimbursement from disregarded entities and joint ventures in which it has an ownership interest. Do not include any Medicare-related expenses or revenue properly reported in Part I, line 7f or 7g.
In Part VI, the organization should describe what portion of its Medicare shortfall, if any, it believes should constitute community benefit, and explain its rationale for its position. As described below, the organization also can enter in Part VI the amount of any Medicare revenues and costs not included in its Medicare Cost Report(s) for the year, and can enter a reconciliation of the amounts reported in Section B (including the surplus or shortfall reported on line 7) and the total revenues and costs attributable to all of the organization's Medicare programs.
Enter all net patient service revenue (for Medicare fee for service (FFS) patients) associated with the allowable costs the organization reports in its Medicare Cost Report(s) for the year, including payments for indirect medical education (IME) (except for Medicare Advantage IME), Medicare disproportionate share hospital (DSH) revenue, coinsurance, patient deductibles, outliers, capital, bad debt, and any other amounts paid to the organization on the basis of its Medicare Cost Report. Do not include revenue related to subsidized health services as reported in Part I, line 7g (see Worksheet 6), research as reported in Part I, line 7h (see Worksheet 7), or direct graduate medical education (GME) as reported in Part I, line 7f (see Worksheet 5). If the organization has more than one Medicare provider number, combine the revenue attributable to costs reported on the Medicare Cost Reports submitted under each provider number, and report the combined revenues on line 5.
Enter all Medicare allowable costs reported in the organization's Medicare Cost Report(s), except those already reported in Part I, line 7g (subsidized health services) and costs associated with direct GME already reported in Part I, line 7f (health professions education). This can be determined using Worksheet A. If Worksheet A is not used, the organization still must subtract the costs attributable to subsidized health services and direct GME from the Medicare allowable costs it enters on line 6. If the organization has more than one Medicare provider number, it should combine the costs reported in the Medicare Cost Reports submitted under each provider number and report the combined costs on line 6.
Worksheet A (optional)
Complete Worksheets 5 and 6 before completing this Worksheet A.
|1.||Total Medicare allowable costs (from Medicare Cost Report)||$|
|2.||Total Medicare allowable costs (from line 1) included in Worksheet 6, line 3, col. (A)||$|
|3.||Total Medicare allowable costs (from line 1) included in Worksheet 5, line 8 (direct GME)||$|
|4.||Total adjustments to Medicare allowable costs (add lines 2 and 3)||$|
|5.||Total Medicare allowable costs (line 1 minus line 4).
Enter this value in Part III, line 6.
Subtract line 6 from the amount on line 5. If line 6 exceeds line 5, report the surplus (the shortfall) as a negative number.
Check the box that best describes the costing methodology used to report the Medicare allowable costs on line 6. Describe this methodology in Part VI.
The organization must also describe in Part VI its rationale for treating the amount reported in Part III, line 7, or any portion of it, as a community benefit. An organization's rationale must have a reasonable basis. Do not include this amount in Part I, line 7.
If the organization received any prior year settlements for Medicare-related services in the current tax year, it can provide an explanation in Part VI, line 1.
Answer “Yes” if the organization had a written debt collection policy on the collection of amounts owed by patients during its tax year.
For purposes of line 9a, a “written debt collection policy” includes a written billing and collections policy, or in the case of an organization that does not have a separate written billing and collections policy, a written financial assistance policy that includes the actions the organization may take in the event of non-payment, including collection actions and reporting to credit agencies.
Answer “Yes” if the organization's written debt collection policy that applied to the facilities that served the largest number of the organization's patients during the tax year contained provisions for collecting amounts due from those patients who the organization knows qualify for financial assistance. If the organization answers “Yes,” describe in Part VI the collection practices that it follows for such patients, whether or not such practices apply specifically to such patients or more broadly to also cover other types of patients.
List any management company, joint venture, or other separate entity (whether treated as a partnership or a corporation), including joint ventures outside of the United States, of which the organization is a partner or shareholder;
In which persons described in 1a and/or 1b below owned, in the aggregate, more than 10% of the share of profits of such partnership or LLC interest, or stock of the corporation:
Persons who were officers, directors, trustees, or key employees of the organization at any time during the organization's tax year, and/or
Physicians who were employed as physicians by, or had staff privileges with, one or more of the organization's hospitals; and
Provided management services used by the organization in its provision of medical care, or
Provided medical care, or owned or provided real property, tangible personal property, or intangible property used by the organization or by others to provide medical care.
Examples of such joint ventures and management companies include:
An ancillary joint venture formed by the organization and its officers or physicians to conduct an exempt or unrelated business activity,
A company owned by the organization and its officers or physicians that owns and leases to the organization a hospital or other medical care facility, and
A company that owns and leases to entities other than the organization diagnostic equipment or intellectual property used to provide medical care.
For purposes of Part IV, ownership interests can be direct or indirect. For example, if a joint venture reported in Part IV is owned, in part, by a physician group practice owned by staff physicians of the organization's hospital, report the physicians' indirect ownership interest in the joint venture in proportion to their ownership share of the physician group practice.
Do not include publicly traded entities or entities whose sole income is passive investment income from interest or dividends.
For purposes of Part IV, the aggregate percentage share of profits or stock ownership percentage of officers, directors, trustees, key employees, and physicians who are employed as physicians by, or have staff privileges with, one or more of the organization's hospitals is measured as of the earlier of the close of the tax year of the organization or the last day the organization was a member of the joint venture. All stock, whether common or preferred, is considered stock for purposes of determining the stock ownership percentage. Provide all the information requested below for each such entity.
In Part V, the organization must list all of its hospital facilities in Section A, complete separate Sections B and C for each of its hospital facilities or facility reporting groups listed in Section A, and list its non-hospital health care facilities in Section D.
Section 501(r)(6) requires a hospital facility to forego extraordinary collections actions before the facility has made reasonable efforts to determine the individual's eligibility under the facility's FAP. No inference should be made regarding whether the actions listed in lines 18a through 18c, 19a through 19c, or described in Part V, Section C as “other similar actions,” are “extraordinary collection actions.”
(A) a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in--
placing the health of the individual (or, for a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,
serious impairment to bodily functions, or
serious dysfunction of any bodily organ or part; or
that there is inadequate time to effect a safe transfer to another hospital before delivery, or
that transfer may pose a threat to the health or safety of the woman or the unborn child.
Under Section 501(r)(5), the maximum amounts that can be charged to FAP-eligible individuals for emergency or other medically necessary care are the amounts generally billed to individuals who have insurance covering such care.
Line 2: If the organization checked “Yes,” provide details regarding the hospital facility(ies) acquired or placed into service as a tax-exempt hospital in the current tax year or the immediately preceding tax year.
Line 3j: If the organization checked line 3j, describe the other content included in the hospital facility's CHNA report.
Line 5: If the organization checked “Yes,” summarize, in general terms, how and over what time period such input was provided (for example, whether through meetings, focus groups, interviews, surveys, written correspondence, and between what dates); the names of any organizations providing input; and describe the medically underserved, low-income, or minority populations being represented by organizations or individuals that provided input. A CHNA report does not need to name or otherwise identify any specific individual providing input on the CHNA. In the event a hospital facility solicits, but cannot obtain, input from a source required by line 5, the hospital facility's CHNA report also must describe the hospital facility's efforts to solicit input from such source.
Line 6a: If the organization checked “Yes,” list the other hospital facilities with which the hospital facility conducted its CHNA.
Line 6b: If the organization checked “Yes,” list the organizations other than hospital facilities with which the hospital facility conducted its CHNA.
Line 7d: If the organization checked line 7d, describe the other means that the hospital facility used to make its CHNA widely available.
Line 11: Describe how the hospital facility is addressing the significant health needs identified in its most recently conducted CHNA and any such needs that are not being addressed together with the reasons why such needs are not being addressed.
Line 13b: Describe the criteria the hospital facility used to determine eligibility for free or discounted care (including whether the hospital facility used the income level of patients, patients’ families, or patients’ guarantors as a factor).
Line 13h: If the organization checked line 13h, describe the other eligibility criteria used.
Line 15e: If the organization checked line 15e, describe the other methods for applying for financial assistance.
Line 16i: If the organization checked line 16i, describe other ways that the hospital facility publicized its financial assistance policy.
Line 18d: If the organization checked line 18d, describe the other similar actions that the hospital facility was permitted to take under its policies during the tax year before making reasonable efforts to determine the individual's eligibility under the facility's FAP.
Line 19d: If the organization checked line 19d, describe the other similar actions that the hospital facility was permitted to take under its policies during the tax year before making reasonable efforts to determine the individual's eligibility under the facility's FAP.
Line 20e: If the organization checked line 20e, describe the other efforts that the hospital facility made.
Line 21c: If the organization checked line 21c, describe how the hospital facility limited who was eligible to receive care for emergency services.
Line 21d: If the organization checked line 21d, describe the other reasons why the hospital facility did not have a written nondiscriminatory policy for emergency medical care.
Line 22d: If the organization checked line 22d, explain what other means the hospital facility used to determine the maximum amounts that can be charged to FAP-eligible individuals for emergency or other medically necessary care.
Line 23: If the organization checked “Yes” to line 23, explain the circumstances in which the hospital facility charged any FAP-eligible individual more than the amounts generally billed to individuals who had insurance covering such care.
Line 24: If the organization answered “Yes” to line 24, explain the circumstances in which the hospital facility charged any FAP-eligible individual an amount equal to the gross charge for any service provided to that individual.
If applicable, describe the criteria used for determining eligibility for free or discounted care under the organization's financial assistance policy. Also describe whether the organization uses an asset test or other threshold, regardless of income, to determine eligibility for free or discounted care.
If the organization's community benefit report is in a report prepared by a related organization, and not in a separate report prepared by the organization, identify the related organization and list its employer identification number.
If applicable, describe if the organization included as subsidized health services any costs attributable to a physician clinic, and report such costs the organization included.
If applicable, enter the bad debt expense included on Form 990, Part IX, line 25, column (A), (but subtracted for purposes of calculating the percentages in this column).
Provide an explanation of the costing methodology used to calculate the amounts reported for each line in the table. If a cost accounting system was used, indicate whether the cost accounting system addresses all patient segments (for example, inpatient, outpatient, emergency room, private insurance, Medicaid, Medicare, uninsured, or self pay). Also, indicate if a cost-to-charge ratio was used for any of the figures in the table. Describe whether this cost-to-charge ratio was derived from Worksheet 2, Ratio of Patient Care Cost-to-Charges, and, if not, what kind of cost-to-charge ratio was used and how it was derived. If some other costing methodology was used besides a cost accounting system, cost-to-charge ratio, or a combination of the two, describe the method used.
Describe how the organization’s community building activities, as reported in Part II, promote the health of the community or communities the organization serves.
Describe the methodology used to determine the amount in Part III, line 2, including how the organization accounts for discounts and payments on patient accounts in determining bad debt expense.
Describe the methodology used to determine the amount reported on line 3. Also describe the rationale, if any, for including any portion of bad debt as community benefit.
Provide, if applicable, the text of the footnote to the organization's financial statements that describes bad debt expense, or report the page number(s) of the organization's most recent audited financial statements on which the footnote appears. If the organization's financial statements include a footnote on these issues that also includes other information, report only the relevant portions of the footnote. If the organization's financial statements do not contain such a footnote, enter that the organization's financial statements do not include such a footnote, and explain how the financial statements account for bad debt, if at all.
Describe the costing methodology used to determine the Medicare allowable costs reported in Part III, line 6. Describe, if applicable, the extent to which any shortfall reported in Part III, line 7, should be treated as a community benefit, and the rationale for the organization's position.
If the organization has a written debt collection policy and answered “Yes,” to Part III, line 9b, describe the collection practices in the policy that apply to patients who it knows qualify for financial assistance, whether the practices apply specifically to such patients or also cover other types of patients.
A majority of the organization's governing body is comprised of persons who reside in the organization's primary service area who are neither employees nor independent contractors of the organization, nor family members thereof;
The organization extends medical staff privileges to all qualified physicians in its community for some or all of its departments or specialties; and
How the organization applies surplus funds to improvements in patient care, medical education, and research.
Worksheet 1 can be used to calculate the organization's financial assistance (sometimes referred to as “charity care”) at cost reported on Part I, line 7a. Refer to instructions for Part I, line 1 for the definition of financial assistance.
|Gross patient charges|
|1.||Amount of gross patient charges written off under financial assistance policies||1.|
|Total community benefit expense|
|2.||Ratio of patient care cost to charges (from Worksheet 2, if used)||2.|
|3.||Estimated cost (multiply line 1 by line 2, or obtain from cost accounting)||3.|
|4.||Medicaid provider taxes, fees, and assessments||4.|
|5.||Total community benefit expense (add lines 3 and 4; enter on Part I, line 7a, column (c))||5.|
|Direct offsetting revenue|
|6.||Revenue from uncompensated care pools or programs||6.|
|7.||Other direct offsetting revenue||7.|
|8.||Total direct offsetting revenue (add lines 6 and 7; enter on Part I, line 7a, column (d))||8.|
|9.||Net community benefit expense (subtract line 8 from line 5; enter on Part I, line 7a, column (e))||9.|
|10.||Total expense (enter amount from Form 990, Part IX, line 25, column (A), including the organization's share of joint venture expenses, and excluding any bad debt expense included in Part IX, line 25)||10.|
|11.||Percent of total expense
(divide line 9 by line 10; enter on Part I, line 7a, column (f))
Worksheet 2 can be used to calculate the organization's ratio of patient care cost to charges. An organization that does not use Worksheet 2 to determine a ratio of patient care cost to charges should make any necessary adjustments for patient care charges and community benefit programs to avoid double counting.
|Patient care cost|
|1.||Total operating expense||1.|
|2.||Nonpatient care activities||2.|
|3.||Medicaid provider taxes, fees, and assessments||3.|
|4.||Total community benefit expense||4.|
|5.||Total community building expense||5.|
|6.||Total adjustments (add lines 2 through 5)||6.|
|7.||Adjusted patient care cost (subtract line 6 from line 1)||7.|
|Patient care charges|
|8.||Gross patient charges||8.|
|9.||Gross charges for community benefit programs||9.|
|10.||Adjusted patient care charges (subtract line 9 from line 8)||10.|
|Calculation of ratio of patient care costs to charges|
|11.||Ratio of patient care cost to charges (divide line 7 by line 10; report on the applicable lines of Worksheets 1, 3, or 6)||11.||%|
Worksheet 3 can be used to report the cost of Medicaid and other means-tested government health programs. A “means-tested government program” is a government health program for which eligibility depends on the recipient's income or asset level.
“Medicaid” means the United States health program for individuals and families with low incomes and resources. “Other means-tested government programs” means government-sponsored health programs where eligibility for benefits or coverage is determined by income or assets. Examples include:
The State Children's Health Insurance Program (SCHIP), a United States federal government program that gives funds to states in order to provide health insurance to families with children; and
Other federal, state, or local health care programs.
Report Medicaid and other means-tested government program revenues and expenses from all states, not just from the organization's home state.
Other means-tested government health programs
|Gross patient charges|
|1.||Gross patient charges from the programs||1.|
|Total community benefit expense|
|2.||Ratio of patient care cost to charges (from Worksheet 2, if used)||2.||%||%|
|3.||Cost (multiply line 1 by line 2, or obtain from cost accounting)||3.|
|4.||Medicaid provider taxes, fees, and assessments||4.|
|5.||Total community benefit expense Total community benefit expense (add lines 3 and 4; enter amount from column (A) on Part I, line 7b, column (c); and enter amount from column (B) on Part I, line 7c, column (c))||5.|
|Direct offsetting revenue|
|6.||Net patient service revenue||6.|
|7.||Payments from uncompensated care pools or programs||7.|
|9.||Total direct offsetting revenue (add lines 6 through 8; enter amount from column (A) on Part I, line 7b, column (d) and enter amount from column (B) on Part I, line 7c, column (d))||9.|
|10.||Net community benefit expense (subtract line 9 from line 5; enter amount from column (A) on Part I, line 7b, column (e); enter amount from column (B) on Part I, line 7c, column (e))||10.|
|11.||Total expense (enter amount from Form 990, Part IX, line 25, column (A), including the organization's share of joint venture expenses, and excluding any bad debt expense included in Part IX, line 25, in both columns (A) and (B))||11.|
|12.||Percent of total expense (line 10 divided by line 11; enter amount from column (A) on Part I, line 7b, column (f); enter amount from column (B) on Part I, line 7c, column (f))||12.||%||%|
Worksheet 4 can be used to report the net cost of community health improvement services and community benefit operations.
Total community benefit expense
Direct offsetting revenue
Net community benefit expense (subtract col. (B) from col. (A) for lines 1–5)
|1.||Community health improvement services|
|2.||Worksheet subtotal (add lines 1a through 1j)||2.|
|3.||Community benefit operations|
|4.||Worksheet subtotal (add lines 3a through 3d)||4.|
|5.||Worksheet total (add lines 2 and 4; enter amounts from columns (A), (B), and (C) on Part I, line 7e, columns (c), (d), and (e), respectively)||5.|
|6.||Total expense (enter amount from Form 990, Part IX, line 25, column (A), including the organization's share of joint venture expenses, and excluding any bad debt expense included in Part IX, line 25)||6.|
|7.||Percent of total expense (line 5, column (C) divided by line 6; enter amount on Part I, line 7e, column (f)||7.|
“Community health improvement services” means activities or programs, subsidized by the health care organization, carried out or supported for the express purpose of improving community health. Such services do not generate inpatient or outpatient revenue, although there may be a nominal patient fee or sliding scale fee for these services.
“Community benefit operations” means:
Activities associated with conducting community health needs assessments,
Community benefit program administration, and
The organization's activities associated with fundraising or grant-writing for community benefit programs.
Activities or programs cannot be reported if they are provided primarily for marketing purposes or if they are more beneficial to the organization than to the community. For example, the activity or program may not be reported if it is designed primarily to increase referrals of patients with third-party coverage, required for licensure or accreditation, or restricted to individuals affiliated with the organization (employees and physicians of the organization).
To be reported, community need for the activity or program must be established. Community need can be demonstrated through the following.
A CHNA conducted or accessed by the organization.
Documentation that demonstrated community need or a request from a public health agency or community group was the basis for initiating or continuing the activity or program.
The involvement of unrelated, collaborative tax-exempt or government organizations as partners in the activity or program carried out for the express purpose of improving community health.
Community benefit activities or programs also seek to achieve a community benefit objective, including improving access to health services, enhancing public health, advancing increased general knowledge, and relief of a government burden to improve health. This includes activities or programs that do the following.
Are available broadly to the public and serve low-income consumers.
Reduce geographic, financial, or cultural barriers to accessing health services, and if they ceased would result in access problems (for example, longer wait times or increased travel distances).
Address federal, state, or local public health priorities such as eliminating disparities in access to health care services or disparities in health status among different populations.
Leverage or enhance public health department activities such as childhood immunization efforts.
Strengthen community health resilience by improving the ability of a community to withstand and recover from public health emergencies.
Otherwise would become the responsibility of government or another tax-exempt organization.
Advance increased general knowledge through education or research that benefits the public.
Worksheet 5 can be used to report the net cost of health professions education.
“Health professions education” means educational programs that result in a degree, certificate, or training necessary to be licensed to practice as a health professional, as required by state law, or continuing education necessary to retain state license or certification by a board in the individual's health profession specialty. It does not include education or training programs available exclusively to the organization's employees and medical staff or scholarships provided to those individuals. However, it does include education programs if the primary purpose of such programs is to educate health professionals in the broader community. Costs for medical residents and interns can be included, even if they are considered “employees” for purposes of Form W-2, Wage and Tax Statement.
Examples of health professions education activities or programs that should and should not be reported are as follows.
|Activity or Program||Report||Example Rationale|
|Scholarships for community members||Yes||More benefit to community than organization|
|Scholarships for staff members||No||More benefit to organization than community|
|Continuing medical education for community physicians||Yes||Accessible to all qualified physicians|
|Continuing medical education for own medical staff||No||Restricted to own medical staff members|
|Nurse education if graduates are free to seek employment at any organization||Yes||More benefit to community than organization|
|Nurse education if graduates are required to become the organization's employees||No||Program designed primarily to benefit the organization|
Stipends, fringe benefits of interns, residents, and fellows in accredited graduate medical education programs.
Salaries and fringe benefits of faculty directly related to intern and resident education.
Salaries and fringe benefits of faculty directly related to teaching:
students enrolled in nursing programs that are licensed by state law or, if licensing is not required, accredited by the recognized national professional organization for the particular activity,
students enrolled in allied health professions education programs, licensed by state law or, if licensing is not required, accredited by the recognized national professional organization for the particular activity, including, but not limited to, programs in pharmacy, occupational therapy, dietetics, and pastoral care,
and continuing health professions education open to all qualified individuals in the community, including payment for development of online or other computer-based training accepted as continuing health professions education by the relevant professional organization.
Scholarships provided by the organization to community members.
|Total community benefit expense|
|2.||Interns, residents, and fellows||2.|
|4.||Other allied health professions, students||4.|
|5.||Continuing health professions education||5.|
|7.||Total community benefit expense (add lines 1 through 6; enter on Part I, line 7f, column (c))||7.|
|Direct offsetting revenue|
|8.||Medicare reimbursement for direct GME||8.|
|9.||Medicaid reimbursement for direct GME||9.|
|10.||Continuing health professions education reimbursement/tuition||10.|
|12.||Total direct offsetting revenue (add lines 8 through 11; enter on Part I, line 7f, column (d))||12.|
|13.||Net community benefit expense (line 7 minus line 12; enter on Part I, line 7f, column (e))||13.|
|14.||Total expense (enter amount from Form 990, Part IX, line 25, column (A), including the organization's share of joint venture expenses, and excluding any bad debt expense included in Part IX, line 25)||14.|
|15.||Percent of total expense (line 13 divided by line 14; enter amount on Part I, line 7f, column (f))||15.||%|
Worksheet 6 can be used to calculate the net cost of subsidized health services. Complete Worksheet 6 for each subsidized health service and report in Part I the total for all subsidized health services combined.
“Subsidized health services” means clinical services provided despite a financial loss to the organization. The financial loss is measured after removing losses associated with bad debt, financial assistance, Medicaid, and other means-tested government programs. Losses attributable to these items are not included when determining which clinical services are subsidized health services because they are reported as community benefit elsewhere in Part I or as bad debt in Part III. Losses attributable to these items are also excluded when measuring the losses generated by the subsidized health services. In addition, in order to qualify as a subsidized health service, the organization must provide the service because it meets an identified community need. A service meets an identified community need if it is reasonable to conclude that if the organization no longer offered the service,
The service would be unavailable in the community,
The community's capacity to provide the service would be below the community's need, or
The service would become the responsibility of government or another tax-exempt organization.
Subsidized health services can include qualifying inpatient programs (for example, neonatal intensive care, addiction recovery, and inpatient psychiatric units) and outpatient programs (emergency and trauma services, satellite clinics designed to serve low-income communities, and home health programs). Subsidized health services generally exclude ancillary services that support inpatient and ambulatory programs such as anesthesiology, radiology, and laboratory departments. Subsidized health services include services or care provided at physician clinics and skilled nursing facilities if such clinics or facilities satisfy the general criteria for subsidized health services. An organization that includes any costs associated with stand-alone physician clinics (not other facilities at which physicians provide services) as subsidized health services in Part I, line 7g, must describe that it has done so and report in Part VI such costs included in Part I, line 7g.
The organization can report a physician clinic as a subsidized health service only if the organization operated the clinic and associated hospital services at a financial loss to the organization during the year.
|Program name: ______________________________||(A)
Total subsidized health service program
Medicaid and other means- tested government health programs
(subtract columns (B), (C), and (D) from column (A))
|Gross patient charges|
|1.||Gross patient charges from program(s)||1.|
|Total community benefit expense|
|2.||Ratio of patient care cost to charges (from Worksheet 2, if used)||2.||%||%||%||%|
|3.||Total community benefit expense (multiply line 1 by line 2, or obtain from cost accounting; enter column (E) on Part I, line 7g, column (c))||3.|
|Direct offsetting revenue|
|4.||Net patient service revenue||4.|
|6.||Total direct offsetting revenue (add lines 4 and 5; enter column (E) on Part I, line 7g, column (d)).||6.|
|7.||Net community benefit expense (subtract line 6 from line 3; enter column (E) on Part I, line 7g, column (e))||7.|
|9.||Percent of total expense (line 7, column (E) divided by line 8; enter on Part I, line 7g, column (f))||9.||%|
Worksheet 7 can be used to report the cost of research conducted by the organization.
Research means any study or investigation the goal of which is to generate increased generalizable knowledge made available to the public (for example, knowledge about underlying biological mechanisms of health and disease, natural processes, or principles affecting health or illness; evaluation of safety and efficacy of interventions for disease such as clinical trials and studies of therapeutic protocols; laboratory-based studies; epidemiology, health outcomes, and effectiveness; behavioral or sociological studies related to health, delivery of care, or prevention; studies related to changes in the health care delivery system; and communication of findings and observations, including publication in a medical journal.) The organization can include the cost of internally funded research it conducts, as well as the cost of research it conducts funded by a tax-exempt or government entity.
The organization cannot include in Part I, line 7h, direct or indirect costs of research funded by an individual or an organization that is not a tax-exempt or government entity. However, the organization can describe in Part VI any research it conducts that is not funded by tax-exempt or government entities, including the cost of such research, the identity of the funder, how the results of such research are made available to the public, if at all, and whether the results are made available to the public at no cost or nominal cost.
Examples of costs of research include, but are not limited to, salaries and benefits of researchers and staff, including stipends for research trainees (Ph.D. candidates or fellows); facilities for collection and storage of research, data, and samples; animal facilities; equipment; supplies; tests conducted for research rather than patient care; statistical and computer support; compliance (for example, accreditation for human subjects protection, biosafety, Health Insurance Portability and Accountability Act (HIPPA), etc.); and dissemination of research results.
|Total community benefit expense|
|3.||Total community benefit expense (add lines 1 and 2; enter on Part I, line 7h, column (c))||3.|
|Direct offsetting revenue|
|4.||License fees and royalties||4.|
|6.||Total direct offsetting revenue (add lines 4 and 5; enter on Part I, line 7h, column (d))||6.|
|7.||Net community benefit expense (subtract line 6 from line 3; enter on Part I, line 7h, column (e))||7.|
|9.||Percent of total expense
(divide line 7 by line 8; enter on Part I, line 7h, column (f))
Worksheet 8 can be used to report cash contributions or grants and the cost of in-kind contributions that support financial assistance, health professions education, and other community benefit activities reportable in Part I, lines 7a through 7h. Report such contributions on line 7i, and not on lines 7a through 7h.
“Cash and in-kind contributions” means contributions made by the organization to health care organizations and other community groups restricted, in writing, to one or more of the community benefit activities described in the table in Part I, line 7 (and the related worksheets and instructions). “In-kind contributions” include the cost of staff hours donated by the organization to the community while on the organization's payroll, indirect cost of space donated to tax-exempt community groups (such as for meetings), and the financial value (generally measured at cost) of donated food, equipment, and supplies.
Do not report as cash or in-kind contributions any payments that the organization makes in exchange for a service, facility, or product, or that the organization makes primarily to obtain an economic or physical benefit; for example, payments made in lieu of taxes that the organization makes to prevent or forestall local or state property tax assessments, and a teaching hospital's payments to its affiliated medical school for intern or resident supervision services by the school's faculty members.
Report cash contributions and grants made by the organization to entities and community groups that share the organization's goals and mission. Do not report cash or in-kind contributions contributed by employees, or emergency funds provided by the organization to the organization's employees; loans, advances, or contributions to the capital of another organization that are reportable in Part X of the core Form 990; or unrestricted grants or gifts to another organization that can, at the discretion of the grantee organization, be used other than to provide the type of community benefit described in the table in Part I, line 7.
Cash contrib- utions
In-kind contrib- utions
|1.||Total community benefit expense (enter amount from column (C) on Part I, line 7i, column (c))||1.|
|2.||Direct offsetting revenue (enter amount from column (C) on Part I, line 7i, column (d))||2.|
|3.||Net community benefit expense (subtract line 2 from line 1; enter on Part I, line 7i, column (e))||3.|
|5.||Percent of total expense (divide line 3 by line 4; enter on Part I, line 7i, column (f))||5.||%|
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