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Instructions for Schedule H (Form 990)
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10:52 - 28-JAN-2010
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2009
Department of the Treasury
Internal Revenue Service
Instructions for Schedule H
(Form 990)
Hospitals
Section references are to the Internal
Revenue Code unless otherwise noted.
General Instructions
Note. Terms in bold are defined in the
Glossary of the Instructions for Form 990.
Purpose of Schedule
Schedule H (Form 990) must be
completed by an organization that
operates at least one facility that is, or is
required to be, licensed, registered, or
similarly recognized by a state as a
hospital.
The organization must file a single
Schedule H (Form 990) that aggregates
information from the following.
1. Hospitals directly operated by the
organization.
2. Hospitals operated by disregarded
entities of which the organization is the
sole member.
3. Other facilities or programs of the
organization or any of the entities
described in 1 or 2, even if provided by a
facility that is not a hospital or if provided
separately from the hospital’s license.
4. Hospitals operated by any joint
venture treated as a partnership, to the
extent of the organization’s proportionate
share of the joint venture. Proportionate
share is defined as the ending capital
account percentage listed on the
Schedule K-1 (Form 1065), Partner’s
Share of Income, Deductions, Credits,
etc., Part II, line J, for the partnership tax
year ending in the organization’s tax year
being reported on the organization’s Form
990. If Schedule K-1 (Form 1065) is not
available, the organization can use other
business records to make a reasonable
estimate, including the most recently
available Schedule K-1 (Form 1065),
adjusted as appropriate to reflect facts
known to the organization, or information
used for purposes of determining its
proportionate share of the venture for the
organization’s financial statements.
5. In the case of a group return filed
by the organization, hospitals operated
directly by members of the group
exemption included in the group return,
hospitals operated by a disregarded entity
of which a member included in the group
return is the sole member, hospitals
operated by a joint venture treated as a
partnership to the extent of the group
member’s proportionate share
(determined in the manner described in 4,
earlier), and other facilities or programs of
a member included in the group return
even if such facilities are not hospitals or
if such programs are provided separately
from the hospital’s license.
affiliated with or otherwise related to the
organization (for example, part of an
affiliated health care system).
Example. The organization is the
sole member of a disregarded entity. The
disregarded entity owns 50% of a joint
venture treated as a partnership. The
partnership in turn owns 50% of another
joint venture treated as a partnership that
operates a hospital and a freestanding
outpatient clinic that is not part of the
hospital’s license. (Assume the respective
proportionate shares of the partnerships
based on capital account percentages
listed on the partnerships’ Schedule K-1
(Form 1065), Part II, line J, are also 50%.)
The organization would report 25% (50%
of 50%) of the hospital’s and outpatient
clinic’s aggregate information on
Schedule H (Form 990).
An organization that answered “Yes” on
Form 990, Part IV, Checklist of Required
Schedules, line 20, must complete and
attach Schedule H to Form 990.
Note that while information from all of
the above sources is aggregated for
purposes of Schedule H (Form 990), the
organization is required to report in Part V
each of its facilities required to be
licensed, registered, or similarly
recognized as a health care facility under
state law, whether operated directly by
the organization or indirectly through a
disregarded entity or joint venture taxed
as a partnership. In addition, the
organization must report in Part VI,
Supplemental Information, summary
information describing the number of
other types of facilities for which it reports
information on Schedule H (Form 990)
(for example, two rehabilitation clinics,
four diagnostic centers).
Organizations are not to report
information from hospitals located outside
the United States in Parts I, II, III, or V.
Information from foreign joint ventures
and partnerships must be reported in Part
IV, Management Companies and Joint
Ventures. Information concerning foreign
hospitals and facilities can be described
in Part VI.
Except as provided in Part IV, do not
report on Schedule H (Form 990)
information from an entity organized as a
separate legal entity from the organization
and treated as a corporation for federal
income tax purposes (except for
members of a group exemption included
in a group return filed by the
organization), even if such entity is
Cat. No. 51526B
Who Must File
For purposes of Schedule H (Form
990), a hospital is a facility that is, or is
required to be, licensed, registered, or
similarly recognized by a state as a
hospital. This includes a hospital operated
through a disregarded entity or a joint
venture treated as a partnership. It does
not include hospitals that are located
outside the United States. It also does
not include hospitals operated by entities
organized as separate legal entities from
the organization that are treated as a
corporation for federal tax purposes
(except for members of a group
exemption included in a group return filed
by the organization). If the organization
operates multiple hospitals, or if it files a
group return for a group that operates one
or more hospitals, complete one
Schedule H (Form 990) for all of the
hospitals operated by the filing
organization or the group, and report
aggregate information from all such
hospitals as described in Purpose of
Schedule, General Instructions.
If an organization is not required to file
Form 990 but chooses to do so, it must
file a complete return and provide all of
the information requested, including the
required schedules.
An organization that does not operate
one or more facilities that satisfy the
definition of a hospital, above, should not
file Schedule H (Form 990).
The definition of hospital for
TIP Schedule A (Form 990), Public
Charity Status and Public Support,
Part I, line 3, and the definition of hospital
for Schedule H (Form 990) are not the
same. Accordingly, an organization that
checks box 3 in Part I of Schedule A
(Form 990) to report that it is a hospital or
cooperative hospital service organization,
must complete and attach Schedule H to
Form 990 only if it meets the definition of
hospital for purposes of Schedule H
(Form 990), as explained above.
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Instructions for Schedule H (Form 990)
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Specific Instructions
Part I. Charity Care and
Certain Other Community
Benefits at Cost
Part I requires reporting of charity care
policies, the availability of community
benefit reports, and the cost of certain
charity care and other community benefit
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.
Line 1. A “charity care policy” is a policy
describing how the organization will
provide “charity care” at its hospital(s) and
other facilities, if any. “Charity care”
means free or discounted health services
provided to persons who meet the
organization’s criteria for financial
assistance and are thereby deemed
unable to pay for all or a portion of the
services. “Charity care” does not include:
bad debt or uncollectible charges that the
organization recorded as revenue but
wrote off due to failure to pay by patients,
or the cost of providing such care to such
patients; the difference between the cost
of care provided under Medicaid or other
means-tested government programs or
under Medicare and the revenue derived
therefrom; or contractual adjustments with
any third-party payors.
Line 2. Check only one of the three
boxes. “Applied uniformly to all hospitals”
means that all of the organization’s
hospitals and other facilities use the same
charity care policy. “Applied uniformly to
most hospitals” means that the majority of
the organization’s hospitals and other
facilities use the same charity care policy.
“Generally tailored to individual hospitals”
means that the majority of the
organization’s hospitals and other
facilities use different charity care
policies. If the organization operates only
one hospital or other facility, check
“Applied uniformly to all hospitals.”
Line 3. Answer lines 3a, 3b, and 3c
based on the charity care eligibility criteria
that apply to (1) the largest number of the
organization’s patients based on patient
contacts or encounters or (2) if the
organization does not operate its own
hospital or other facility, the largest
number of patients of a hospital or facility
operated by a joint venture in which the
organization has an ownership interest.
For example, if the organization has two
hospitals or other facilities, use the charity
care eligibility criteria used by the hospital
or other facility which has the most patient
contacts or encounters during the tax
year.
Line 3a. “Federal Poverty Guidelines”
(FPG) are the Federal Poverty Guidelines
established by the U.S. Department of
Health and Human Services. If the facility
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%.”
Line 3b. If the facility 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.
Line 3c. If applicable, describe the
other income-based criteria, 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.
Line 4. “Medically indigent” means
persons whom the organization has
determined are unable to pay some or all
of their medical bills because their
medical bills exceed a certain percentage
of their family or household income or
assets (for example, due to catastrophic
costs or conditions), even though they
have income or assets that otherwise
exceed the generally applicable eligibility
requirements for free or discounted care
under the organization’s charity care
policy.
Line 5. Answer lines 5a, 5b, and 5c
based on the organization’s budgeted
amounts under its charity care policy.
Line 5a. 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
charity care policy. If “No,” skip to line 6a.
Line 5b. 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.
Line 5c. Answer “Yes” if the
organization denied financial assistance
to any patient eligible for free or
discounted care under its charity care
policy solely because the organization’s
charity care budget was exceeded.
Line 6. Answer lines 6a and 6b based
on the organization’s annual community
benefit report.
Line 6a. Answer “Yes” if the
organization prepared an annual written
report 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
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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.
Line 6b. Answer “Yes” if the
organization makes its annual community
benefit report available to the public.
Some of the ways in which an
TIP organization can make its
community benefit report available
to the public are to post the report on the
organization’s website, to publish and
distribute the report to the public by mail
or at its facilities, or to submit the report to
a state agency or other organization that
makes the report available to the public.
Lines 7a through 7k. Report on the
table (lines 7a through 7k), at cost, the
organization’s charity care and certain
other community benefits. Report on line
7i contributions to community groups that
the organization restricts to one or more
of the community benefit activities listed
in lines 7a through 7h. Do not report such
contributions on lines 7a through 7h. To
calculate the amounts to be reported on
the table, use the worksheets or other
equivalent documentation that
substantiates the information reported
consistent with the methodology used on
the worksheets. See the instructions to
the worksheets for definitions of the
various types of community benefit (for
example, community health improvement
services, health professions education,
subsidized health services, research, etc.)
to be reported on lines 7a through 7k.
If the organization completed
TIP worksheets other than on an
aggregate basis (for example,
facility by facility, joint venture by joint
venture), the organization should
aggregate all information from these
worksheets for purposes of reporting
amounts on the table. Only the portion of
each joint venture or partnership that
represents the organization’s
proportionate share, based on capital
interest, can be reported on lines 7a
through 7k (see Purpose of Schedule for
instructions on aggregation).
Use the organization’s most accurate
costing methodology (cost accounting
system, cost-to-charge ratio, or other) to
calculate the amounts reported on the
table. If the organization uses a
cost-to-charge ratio, it can use Worksheet
2. Ratio of Patient Care Cost to Charges,
for this purpose. See the instructions for
Part VI, line 1, regarding an explanation
of the costing methodology used to
calculate the amounts reported on the
table.
If the organization included any costs
attributable to a physician clinic as
subsidized health services on Part I, line
7g, report these costs on Part VI, line 1.
If the organization included any bad
debt expense on Form 990, Part IX, line
25 but subtracted this bad debt for
purposes of calculating the amount
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Instructions for Schedule H (Form 990)
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reported on line 7f, report this bad debt
expense on Part VI, line 1.
Do not report bad debt expense on
lines 7a through 7k.
The following are descriptions of the
type of information reported in each
column of the table.
Column (a). “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.
Column (b). “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.
Column (c). “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 administration costs related to the
organization’s infrastructure (for example,
space, utilities, custodial services,
security, information systems,
administration, materials management,
and others).
Column (d). “Direct offsetting
revenue” means revenue from the activity
during the year that offsets the total
community benefit expense of that
activity, as calculated on the worksheets
for each line item. “Direct offsetting
revenue” includes any revenue generated
by the activity or program, such as
payment or reimbursement for services
provided to program patients. Direct
offsetting revenue does not include
restricted or unrestricted grants or
contributions that the organization uses to
provide a community benefit.
Example. The organization receives
a restricted grant from an unrelated
organization that must be used by the
organization to provide charity care. The
amount of the restricted grant is not
reportable as direct offsetting revenue on
line 7a, column (d).
Column (e). “Net community benefit
expense” is “Total community benefit
expense” (column (c)) minus “Direct
offsetting revenue” (column (d)). If the
calculated amount is less than zero,
report such amount as a negative
number.
Column (f). “Percent of total
expense” is the “net community benefit
expense” in column (e) divided by the
sum of the amount on Form 990, Part IX,
line 25, column (A) and the organization’s
proportionate share of total expenses of
all joint ventures for which it reports
expenses on the table in Part I, to the
extent that such expenses are not already
reported in Form 990, Part IX, line 25,
column (A). Report the percentage to two
decimal places (x.xx%). Any bad debt
expense included in the denominator
should be removed prior to calculation,
and the amount of bad debt expense that
was included on Form 990, Part IX, line
25, column (A) but removed from this
figure should be reported in Part VI, line
1.
Column (f) “percent of total
TIP expense” is based on column (e)
“net community benefit expense,”
rather than column (c) “total community
benefit expense.” Organizations that
report amounts of direct offsetting
revenue also might wish to report total
community benefit expense (Part I, line 7,
column (c)) as a percentage of total
expenses. Although this percentage
cannot be reported in Part I, line 7,
column (f), it can be reported on Schedule
H (Form 990), Part VI, line 1.
Optional Worksheets for
Part I, Line 7 (Charity Care
and Certain Other
Community Benefits At
Cost)
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 such case, the organization
should aggregate all information from
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these worksheets for purposes of
completing line 7. Complete the table by
aggregating 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,
pursuant to the aggregation instruction in
Purpose of Schedule.
See Worksheets 1 through 8 and
specific instructions for the worksheets
that begin on page 7.
Part II. Community
Building Activities
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 or III of this
schedule. An organization that reports
information in this part must describe, in
Part VI, line 5, how its community building
activities promote the health of the
communities it serves. Do not include
activities in this part that are reported on
Part I, line 7.
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. Do not include any
contribution made by the organization that
was funded in whole or in part by a
restricted grant, to the extent that such
grant was funded by a related
organization.
Line 1. “Physical improvements and
housing” can include, but are not limited
to, the provision or rehabilitation of
housing for vulnerable populations, such
as removing building materials that harm
the health of the residents, neighborhood
improvement or revitalization projects,
provision of housing for vulnerable
patients upon discharge from an inpatient
facility, housing for low-income seniors,
and the development or maintenance of
parks and playgrounds to promote
physical activity.
Line 2. “Economic development” can
include, but is not limited to, assisting
small business development in
neighborhoods with vulnerable
populations and creating new
employment opportunities in areas with
high rates of joblessness.
Line 3. “Community support” can
include, but is not limited to, child care
and mentoring programs for vulnerable
populations or neighborhoods,
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neighborhood support groups, violence
prevention programs, and disaster
readiness and public health emergency
activities, such as community disease
surveillance or readiness training beyond
what is required by accrediting bodies or
government entities.
Line 4. “Environmental improvements”
can include, but are not limited to,
activities to address environmental
hazards that affect community health,
such as alleviation of water or air
pollution, safe removal or treatment of
garbage or other waste products, and
other activities to protect the community
from environmental hazards. The
organization cannot include on this line or
in this part expenditures made to comply
with environmental laws and regulations
that apply to activities of itself, its
disregarded entity or entities, a joint
venture in which it has an ownership
interest, or a member of a group
exemption included in a group return of
which the organization is also a member.
Similarly, the organization cannot include
on this line or in this part expenditures
made to reduce the environmental
hazards caused by, or the environmental
impact of, its own activities, or those of its
disregarded entities, joint ventures, or
group exemption members.
Line 5. “Leadership development and
training for community members” can
include, but is not limited to, training in
conflict resolution; civic, cultural, or
language skills; and medical interpreter
skills for community residents.
Line 6. “Coalition building” can include,
but is not limited to, participation in
community coalitions and other
collaborative efforts with the community to
address health and safety issues.
Line 7. “Community health improvement
advocacy” can include, but is not limited
to, efforts to support policies and
programs to safeguard or improve public
health, access to health care services,
housing, the environment, and
transportation.
Line 8. “Workforce development” can
include, but is not limited to, recruitment
of physicians and other health
professionals to medical shortage areas
or other areas designated as
underserved, and collaboration with
educational institutions to train and recruit
health professionals needed in the
community (other than the health
professions education activities reported
in Part I, line 7f).
Line 9. “Other” refers to community
building activities that protect or improve
the community’s health or safety that are
not described in the categories listed in
lines 1 through 8 above.
Refer to the instructions to Part I, line
7, columns (a) through (f), for descriptions
of the types of information that should be
reported in each column of Part II.
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 Part II separately for
itself and for each disregarded entity, joint
venture in which the organization had an
ownership interest during the tax year,
and group affiliate. The organization
should aggregate the amounts from all
such tables, according to the aggregation
instructions in Purpose of Schedule, and
include the aggregated information in Part
II.
Part III. Bad Debt,
Medicare, & Collection
Practices
Section A. In this section (a) report
aggregate bad debt expense, at cost; (b)
provide an estimate of how much bad
debt expense, if any, reasonably could be
attributable to persons who likely would
qualify for financial assistance under its
charity care policy; and (c) provide a
rationale for what portion of bad debt, if
any, the organization believes should
constitute community benefit. In addition,
the organization must report whether it
has adopted Healthcare Financial
Management Association Statement No.
15, Valuation and Financial Statement
Presentation of Charity Care and Bad
Debts by Institutional Healthcare
Providers (“Statement 15”) and provide
the text of its footnote, if applicable, to its
audited financial statements that
describes the bad debt expense.
Line 1. Indicate whether 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 charity care costs.
Some organizations may rely on
Statement 15 in reporting bad debt
expense and charity care in their audited
financial statements. Statement 15
provides instructions for recordkeeping,
valuation, and disclosure for bad debts.
Line 2. Use the most accurate
system and methodology available to the
organization to report bad debt expense
at cost. If using a cost accounting system
or other costing methodology, enter the
estimated cost of patient care services
attributable to charges written off to bad
debt. If using a cost-to-charge ratio
methodology, the organization can use
Worksheet A (optional). If only a portion
of a patient’s bill for services is written off
as a bad debt, include only the
proportionate amount of the cost of
providing those services that is
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.
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Worksheet A (Optional)
Estimated Bad Debt Expense
(at Cost)
This worksheet is used to estimate the
bad debt expense reported in Part III, line
2, using one of the cost accounting
methods identified in the organization’s
response to Part III, line 4.
1. Bad debt attributable to
patient accounts
2. Ratio of Patient Care cost to
charges (from Worksheet 2,
line 11)
3. Estimated cost of bad debt
attributable to patient
accounts (line 1 multiplied by
line 2).
Enter in Part III, line 2.
$________
________%
$________
Line 3. Provide an estimate of the
amount of cost reported on line 2 that
reasonably could be attributable to
patients who likely would qualify for
financial assistance under the hospital’s
charity care policy as reported in Part I,
lines 1 through 4, but for whom sufficient
information was not obtained to make a
determination of 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
charity care applications that were denied
due to incomplete documentation,
analysis of demographics, or other
analytical methods.
Line 4. In Part VI, line 1, provide the
rationale and the costing methodology
used to determine the amounts reported
on lines 2 and 3. Describe how the
organization accounts for discounts and
payments on patient accounts in
determining bad debt expense. Also,
describe the method the organization
used on line 3 to determine the amount
that reasonably could be attributable to
patients who likely would qualify for
financial assistance under the
organization’s charity care policy if
sufficient information had been available
to make a determination of their eligibility.
Also, provide the footnote from the
organization’s financial statements on bad
debt expense, if applicable, or the
footnotes related to “accounts receivable,”
“allowance for doubtful accounts,” or
similar designations. 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 footnote or
footnotes verbatim. If the organization’s
financial statements include a footnote on
these issues that also includes other
information, report in Part VI, line 1 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
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Instructions for Schedule H (Form 990)
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discusses bad debt expense, “accounts
receivable,” “allowance for doubtful
accounts,” or similar designations, include
a statement in Part VI, line 1 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.
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 aggregate the costs
reported in the Medicare Cost Reports
submitted under each provider number
and report the aggregate costs on line 6.
Section B. In this section report (a)
aggregate allowable costs to provide
services reimbursed by Medicare, (b)
aggregate Medicare reimbursements
attributable to such costs, and (c)
aggregate 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. The
organization should in Part VI, line 1,
describe what portion of its Medicare
shortfall, if any, it believes should
constitute community benefit, and explain
its rationale for its position. As described
on this page, the organization also can
enter in Part VI, line 1 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.
Worksheet B (optional)
Line 5. Enter all net patient service
revenue (for Medicare fee for service
(FFS) patients) associated with 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), 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, aggregate the revenue
attributable to costs reported on the
Medicare Cost Reports submitted under
each provider number, and report the
aggregate revenues on line 5.
Line 6. 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 B. If
Worksheet B is not used, the organization
Complete Worksheets 5 and 6 before
completing Worksheet B.
1.
2.
3.
4.
5.
Total Medicare allowable costs
(from Medicare Cost Report)
Total Medicare allowable costs
(from line 1) included in
Worksheet 6, line 3, col. (A)
Total Medicare allowable costs
(from line 1) included in
Worksheet 5, line 8 (direct
GME) . . . . . . . . . . . . . . . .
Total adjustments to Medicare
allowable costs (add lines 2
and 3) . . . . . . . . . . . . . . . .
Total Medicare allowable costs
(line 1 minus line 4) .
Enter this value in Part III, line
6. . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
Line 7. Subtract line 6 from the
amount on line 5. If line 6 exceeds line 5,
report the excess (the shortfall) as a
negative number.
Line 8. Check the box that best
describes the costing methodology used
to determine the Medicare allowable
costs reported in the organization’s
Medicare Cost Report(s), as reflected on
line 6. Describe this methodology in Part
VI, line 1.
The organization must also describe in
Part VI, line 1 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. Do not include
any Medicare-related expenses or
revenue properly reported in Part I, line
7g or any Medicare-related expenses or
revenue reported in Part I, line 7f in Part
III, Section B.
Lines 5, 6, and 7 do not include
TIP certain Medicare program
revenues and costs, and thus
cannot reflect all of the organization’s
revenues and costs associated with its
participation in Medicare programs. The
organization can describe in Part VI, line
1 the amounts of any Medicare revenues
and costs not included in its Medicare
Cost Report(s) for the year (for example,
revenues and costs for freestanding
ambulatory surgery centers, physician
services billed by the organization, clinical
laboratory services, and revenues and
costs of Medicare Part C and Part D
programs). The organization can enter in
Part VI, line 1 a reconciliation of amounts
reportable in Section B (including the
surplus or shortfall reported on line 7) and
all of the organization’s total revenues
-5-
and total expenses attributable to
Medicare programs.
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.
Section C. In this section report the
organization’s written debt collection
policy.
Line 9a. Answer “Yes” if the
organization has a written debt collection
policy on the collection of amounts owed
by patients.
Line 9b. Answer “Yes” if the
organization’s written debt collection
policy contains provisions for collecting
amounts due from those patients who the
organization knows qualify for charity care
or financial assistance. If the organization
answers “Yes,” describe in Part VI, line 1
the collection practices that it follows with
respect to such patients, whether or not
such practices apply specifically to such
patients or more broadly to also cover
other types of patients.
Part IV. Management
Companies and Joint
Ventures
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,
1. 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 such corporation:
a. Persons who were officers,
directors, trustees, or key employees
of the organization at any time during the
organization’s tax year, and
b. Physicians who were employed as
physicians by, or had staff privileges with,
one or more of the organization’s
hospitals; and
2. That either:
a. Provided management services
used by the organization in its provision of
medical care, or
b. 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’s 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.
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Instructions for Schedule H (Form 990)
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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.
Note. 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.
Column (a). Enter the full legal name of
the entity.
Column (b). Describe the primary
business activity or activities conducted
by the management company, joint
venture, or separate entity.
Column (c). Enter the organization’s
percentage share of profits in the
partnership or LLC, or stock in the entity
that is owned by the organization.
Column (d). Enter the percentage share
of profits or stock in the entity owned by
all of the organization’s current officers,
directors, trustees, or key employees.
Column (e). Enter the percentage share
of profits or stock in the entity owned by
all physicians who are employees
practicing as physicians or who have staff
privileges with one or more of the
organization’s hospitals.
If a physician described above is also
a current officer, director, trustee, or key
employee of the organization, include his
or her profits or stock percentage in
column (d). Do not include this in column
(e).
Part V. Facility Information
Complete Part V by providing in column
(a) the name and address of each of the
organization’s facilities that, at any time
during the tax year, was required to be
licensed, registered, or similarly
recognized as a health care facility under
state law, whether such facility is
operated directly by the organization or
indirectly through a disregarded entity or
joint venture treated as a partnership.
For each facility in column (a), check the
columns applicable to that facility.
List in Part VI, line 1, the number of
each type of health care facility other than
those required to be licensed, registered,
or similarly recognized as a health care
facility under state law (for example, two
rehabilitation clinics, four diagnostic
centers, three skilled nursing facilities,
etc.).
“Licensed hospital” is a facility
licensed, registered, or similarly
recognized by a state as a hospital.
“General medical and surgical” refers
to a hospital primarily engaged in
providing diagnostic and medical
treatment (both surgical and nonsurgical)
to inpatients with a wide variety of
medical conditions, and that may provide
outpatient services, anatomical pathology
services, diagnostic X-ray services,
clinical laboratory services, operating
room services, and pharmacy services.
“Children’s hospital” is a center for
provision of health care to children, and
includes independent acute care
children’s hospitals, children’s hospitals
within larger medical centers, and
independent children’s specialty and
rehabilitation hospitals.
“Teaching hospital” is a hospital that
provides training to medical students,
interns, residents, fellows, nurses, or
other health professionals and providers,
provided that such educational programs
are accredited by the appropriate national
accrediting body.
“Critical access hospital” (CAH) is a
hospital designated as a CAH by a state
that has established a State Medicare
Rural Hospital Flexibility Program in
accordance with Medicare rules.
“Research facility” is a facility that
conducts research.
“ER – 24 hours” refers to a facility that
operates an emergency room 24 hours a
day, 365 days a year.
“ER – other” refers to a facility that
operates an emergency room for periods
less than 24 hours a day, 365 days a
year.
Complete the “Other (Describe)”
column for each type of health care
facility (for example, outpatient physician
clinic, long-term acute care facility,
diagnostic center, rehabilitation clinic,
skilled nursing facility, etc.) that the
organization owns or operates that is not
described in the other columns of Part V.
Part VI. Supplemental
Information
Line 1. Provide the following
supplemental information. Part VI can be
duplicated if more space is needed.
Part I, line 3c. If applicable, describe
the income-based criteria for determining
eligibility for free or discounted care under
the organization’s charity care policy. Also
describe whether the organization uses
an asset test or other threshold,
regardless of income, to determine
eligibility for free or discounted care.
-6-
Part I, line 6a. If the organization’s
community benefit report is contained in a
report prepared by a related
organization, rather than in a separate
report prepared by the organization,
identify the related organization.
Part I, line 7g. If applicable, describe
whether the organization included as
subsidized health services any costs
attributable to a physician clinic, and
report such costs the organization
included.
Part I, line 7, column (f). If
applicable, enter the bad debt expense
included on Form 990, Part IX, line 25,
column (A), but subtracted for purposes
of calculating the percentage in this
column.
Part I, line 7. Provide an explanation
of the costing methodology used to
calculate the amounts reported 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
whether a cost-to-charge ratio was used
for any of the figures reported 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.
Part III, line 4. Provide the rationale
and the costing methodology used to
determine the amount reported in Part III,
lines 2 and 3. Describe how the
organization accounts for discounts and
payments on patient accounts in
determining bad debt expense. Also
describe the method the organization
uses to determine the amount that
reasonably could be attributable to
patients who likely would qualify for
financial assistance under the hospital’s
charity care policy, if sufficient information
had been available to make a
determination of their eligibility.
Also provide, if applicable, the text of
the footnote to the organization’s financial
statements that describes bad debt
expense. 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.
Part III, line 8. Describe the costing
methodology used to determine the
Medicare allowable costs reported in the
organization’s Medicare Cost Report, as
reflected in the amount reported in Part
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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.
Part III, line 9b. If the organization
has a written debt collection policy and
answered “Yes,” to Part III, line 9b,
describe the collection practices set forth
in the policy that apply to patients who it
knows qualify for charity care or financial
assistance, whether or not such practices
apply specifically to such patients or more
broadly to also cover other types of
patients.
Part V. List the number of each type
of health care facility, other than those
required to be licensed, registered, or
similarly recognized as a health care
facility under state law (for example, two
rehabilitation clinics, four diagnostic
centers, three skilled nursing facilities,
etc.).
Line 2. Describe whether, and, if so,
how, the organization assesses the health
care needs of the community or
communities it serves.
Line 3. Describe how the organization
informs and educates patients and
persons who are billed for patient care
about their eligibility for assistance under
federal, state, or local government
programs or under the organization’s
charity care policy. For example, enter
whether the organization posts its charity
care policy, or a summary thereof, and
financial assistance contact information in
admissions areas, emergency rooms, and
other areas of the organization’s facilities
where eligible patients are likely to be
present; provides a copy of the policy, or
a summary thereof, and financial
assistance contact information to patients
as part of the intake process; provides a
copy of the policy, or a summary thereof,
and financial assistance contact
information to patients with discharge
materials; includes the policy, or a
summary thereof, along with financial
assistance contact information, in patient
bills; or discusses with the patient the
availability of various government
benefits, such as Medicaid or state
programs, and assists the patient with
qualification for such programs, where
applicable.
Line 4. Describe the community or
communities the organization serves,
taking into account the geographic
service area(s) (for example, urban,
suburban, rural, etc.), the demographics
of the community or communities (for
example, population, average income,
percentages of community residents with
incomes below the federal poverty
guideline, percentage of the hospital’s
and community’s patients who are
uninsured or Medicaid recipients, etc.),
the number of other hospitals serving the
community or communities, and whether
one or more federally-designated
medically underserved areas or
populations are present in the community.
Line 5. Describe how the organization’s
community building activities, as reported
in Part II, promote the health of the
community or communities the
organization serves.
Line 6. Provide any other information
important to describing how the
organization’s hospitals or other health
care facilities further its exempt purpose
by promoting the health of the community
or communities, including but not limited
to whether:
• 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 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; and
• How the organization applies surplus
funds to improvements in patient care,
medical education, and research.
Line 7. If the organization is part of an
affiliated health care system, describe the
respective roles of the organization and
its affiliates in promoting the health of the
communities served by the system. For
purposes of this question, an “affiliated
health care system” is a system that
includes affiliates under common
governance or control, or that cooperate
in providing health care services to their
community or communities.
Line 8. Identify all states with which the
organization files (or a related
organization files on its behalf) a
community benefit report. Report only
those states in which the organization’s
own community benefit report is filed,
either by the organization itself or by a
related organization on the
organization’s behalf.
Worksheet 1. Charity Care
at Cost (Part I, Line 7a)
Worksheet 1 can be used to calculate the
organization’s charity care at cost
reported on Part I, line 7a. Refer to
instructions for Part I for the definition of
charity care.
-7-
Line 1. Enter the gross patient charges
written off to charity care pursuant to the
organization’s charity care policies.
“Gross patient charges” means the total
charges at the organization’s full
established rates for the provision of
patient care services before deductions
from revenue are applied.
Line 3. Multiply line 1 by line 2, or enter
estimated cost based on the
organization’s cost accounting
methodology. Organizations with a cost
accounting system or a cost accounting
method more accurate than the ratio of
patient care cost to charges from
Worksheet 2 can rely on that system or
method to estimate charity care cost.
Line 4. Enter the Medicaid/provider
taxes paid by the organization, if
payments received from an
uncompensated care pool or DSH
program in the organization’s home state
are intended primarily to offset the cost of
charity care. If such payments are
primarily intended to offset the cost of
Medicaid services, then report this
amount on Worksheet 3, line 4, column
(A). If the primary purpose of such taxes
or payments has not been made clear by
state regulation or law, then the
organization can allocate portions of such
taxes or payments proportionately
between Worksheet 1, line 4, and
Worksheet 3, line 4, column (A) based on
a reasonable estimate of which portions
are intended for charity care and
Medicaid, respectively. “Medicaid provider
taxes” means amounts paid or transferred
by the organization to one or more states
as a mechanism to generate federal
Medicaid DSH funds (the cost of the tax
generally is promised back to
organizations either through an increase
in the Medicaid reimbursement rate or
through direct appropriation).
Line 6. “Revenue from uncompensated
care pools or programs” means payments
received from a state, including Medicaid
DSH funds, as direct offsetting revenue
for charity care or to enhance Medicaid
reimbursement rates for DSH providers. If
such payments are primarily intended to
offset the cost of Medicaid services, then
report this amount on Worksheet 3, line 7,
column (A). If the primary purpose of such
payments has not been made clear by
state regulation or law, then the
organization can allocate portions of such
payments proportionately between
Worksheet 1, line 6, and Worksheet 3,
line 7, column (A) based on a reasonable
estimate of which portions are intended
for charity care and Medicaid,
respectively.
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Worksheet 1. Charity Care at Cost (Part I, line 7a)
Keep for Your Records
Gross patient charges
1. Amount of gross patient charges written off pursuant to charity care 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. Total community benefit expense (add lines 3 and 4; enter on Part I, line 7a, column (c)) . . . . . .
5.
Direct offsetting revenue
6. Revenues from uncompensated care pools or programs (enter on Part I, line 7a, column
(d)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
7. Net community benefit expense (subtract line 6 from line 5; enter on Part I, line 7a, column
(e)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
8. Total expense (enter amount from Form 990, Part IX, Line 25, column (A), and include the
organization’s share of joint venture expenses.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
9. Percent of total expense (divide line 7 by line 8; enter on Part I, line 7a, column (f)) . . . . . . . . . .
9.
Worksheet 2. Ratio of
Patient Care Cost to
Charges
Worksheet 2 can be used to calculate the
organization’s ratio of patient care cost to
charges.
Line 1. Enter the organization’s total
operating expenses (excluding bad debt
expense) from its most recent audited
financial statements.
Line 2. Enter the cost of nonpatient care
activities. “Nonpatient care activities”
include health care operations that
generate “other operating revenue” such
as nonpatient food sales, supplies sold to
nonpatients, and medical records
abstracting. The cost of nonpatient care
activities does not include any total
community benefit expense reported on
Worksheets 1 through 8.
If the organization is unable to
establish the cost associated with
nonpatient care activities, use other
operating revenue from its most recent
audited financial statement as a proxy for
these costs. This proxy assumes no
markup exists for other operating revenue
compared to the cost of nonpatient care
activities. Alternatively, if other operating
revenue provides a markup compared to
the cost of nonpatient care activities, the
organization can assume such a markup
exists when completing line 2.
Line 3. Enter the Medicaid provider
taxes paid by the organization included
on line 1, so this expenditure is not
double-counted when the ratio of patient
care cost to charges is applied.
Line 4. Enter the sum of the total
community benefit expenses reported on
Part I, lines 7e, 7f, 7h, and 7i, column (c),
so these expenses are not
double-counted when the ratio of patient
care cost to charges is applied.
Also include in line 4 the total
community benefit expense reported on
Part I, lines 7a, 7b, 7c, and 7g, column
Worksheet 2.
%
(c), if the organization has not relied on
the ratio of patient care cost to charges
from this worksheet to determine these
expenses, but rather has relied on a cost
accounting system or other cost
accounting method to estimate costs of
charity care, Medicaid or other
Ratio of Patient Care
Cost to Charges
(can be used for other
worksheets)
Keep for Your Records
Patient care cost
1. Total operating expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
Less adjustments
2. Nonpatient care activities . . . . . . . . . . . . . . . .
2.
3. Medicaid provider taxes . . . . . . . . . . . . . . . . .
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.
Less: adjustments
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) . . . . . . .
-8-
11.
%
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Instructions for Schedule H (Form 990)
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means-tested government programs, or
subsidized health services.
Line 5. Enter the gross expense of
community building activities reported in
Part II of Schedule H (Form 990).
Line 9. Enter the gross patient charges
for any community benefit activities or
programs for which the organization has
not relied on the ratio of patient care cost
to charges from this worksheet to
determine the expenses of such activities
or programs. For example, if the
organization uses a cost accounting
system or another cost accounting
method to estimate total community
benefit expense for Medicaid or any other
means-tested government programs,
enter gross charges for those programs in
line 9.
Worksheet 3.
Unreimbursed Medicaid
and Other Means-Tested
Government Programs
(Part I, lines 7b and 7c)
Worksheet 3 can be used to report the
net cost of Medicaid and other
means-tested government programs. A
“means-tested government program” is a
government 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.
Line 1, column (A). Enter the gross
patient charges for Medicaid services.
Include gross patient charges for all
Medicaid recipients, including those
enrolled in managed care plans. In certain
states, SCHIP functions as an expansion
of the Medicaid program, and
reimbursements from SCHIP are not
distinguishable from regular Medicaid
reimbursements. Hospitals that cannot
distinguish their SCHIP reimbursements
from their Medicaid reimbursements can
report SCHIP charges, costs, and
offsetting revenue under column (A).
Line 1, column (B). Enter the amount of
gross patient charges for other
means-tested government programs.
Line 3, column (A). Enter the estimated
cost for Medicaid services. Multiply line 1,
column (A) by line 2, column (A), or enter
estimated cost based on the
organization’s cost accounting system or
method. Organizations with a cost
Worksheet 3. Unreimbursed Medicaid and Other Means-Tested
Government Programs
(Part I, lines 7b and 7c)
Keep for Your Records
(B)
Other means-tested
government
programs
(A)
Medicaid
1. Gross patient charges from the programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
Total community benefit expense
2. Ratio of patient 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. 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.
8. Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
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), and include
the organization’s share of all joint ventures, in both columns (A) and (B)) . . . . . . . . . . .
11.
12. Percent of total expense (line 10 divided by 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.
-9-
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Instructions for Schedule H (Form 990)
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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
accounting system or a cost accounting
method more accurate than the ratio of
patient care cost to charges from
Worksheet 2 can rely on that system or
method to estimate the cost of Medicaid
services. Organizations relying on a cost
accounting system or method other than
the ratio of patient care cost to charges
from Worksheet 2 should use care not to
double-count community benefit
expenses fully accounted for elsewhere
on Schedule H (Form 990) Part I, line 7,
such as the cost of health professions
education, community health
improvement services, community benefit
operations, subsidized health services,
and research.
Line 3, column (B). Enter the estimated
cost for services provided to patients who
receive health benefits from other
means-tested government programs.
Line 4, column (A). Enter the Medicaid
provider taxes paid by the organization if
payments received from an
uncompensated care pool or Medicaid
DSH program in the organization’s home
state are intended primarily to offset the
cost of Medicaid services. If such
payments are primarily intended to offset
the cost of charity care, then report this
amount on Worksheet 1, line 4. If the
primary purpose of such taxes or
payments has not been made clear by
state regulation or law, then the
organization can allocate portions of such
taxes or payments proportionately
between Worksheet 1, line 4, and
Worksheet 3, line 4, column (A), based on
a reasonable estimate of which portions
are intended for charity care and
Medicaid, respectively.
Line 6, column (A). Enter the net
patient service revenue for Medicaid
services, including revenue associated
with Medicaid recipients enrolled in
managed care plans. Do not include
Medicaid reimbursement for direct
graduate medical education (GME) costs,
which should be reported on Worksheet
5, line 9. Include Medicaid reimbursement
for indirect GME costs, including the
indirect IME portion of children’s health
GME. The direct portion of children’s
health GME should be reported on
Worksheet 5, line 10. Also include
Medicaid disproportionate share hospital
(DSH) revenue. “Net patient service
revenue” means payments expected to
be received from patients or third-party
payers for patient services performed
during the year. “Net patient service
revenue ”also includes revenue recorded
in the organization’s audited financial
statements for services performed during
prior years. Organizations can enter in
Part VI, line 1 the amount of prior year
Medicaid revenue included in Part I, line
7b.
Amounts received from the Medicaid
program as “reimbursement for direct
GME” or IME should be treated
consistently with the way the Medicaid
program in the hospital’s home state
classifies the funds.
Line 7, column (A). Enter revenue
received from uncompensated care pools
or programs if payments received from an
uncompensated care pool or Medicaid
DSH program in the organization’s home
state are intended primarily to offset the
cost of Medicaid services. If such
payments are primarily intended to offset
the cost of charity care, then report this
amount on Worksheet 1, line 6. If the
primary purpose of such payments has
not been made clear by state regulation
or law, then the organization can allocate
portions of such payments proportionately
between Worksheet 1, line 6, and
Worksheet 3, line 7, column (A), based on
a reasonable estimate of which portions
are intended for charity care and
Medicaid, respectively.
Worksheet 4. Community
Health Improvement
Services and Community
Benefit Operations (Part I,
Line 7e)
Worksheet 4 can be used to report the
net cost of community health
improvement services and community
benefit operations.
“Community health improvement
services” means activities or programs
carried out or supported for the express
purpose of improving community health
that are subsidized by the health care
organization. Such services do not
generate inpatient or outpatient bills,
although there may be a nominal patient
fee or sliding scale fee for these services.
“Community benefit operations” means
activities associated with community
health needs assessments as well as
community benefit planning and
administration. Community benefit
operations also include 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 and the program is
more beneficial to the organization than to
the community; for instance, if the activity
or program 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.
To be reported, community need for
the activity or program must be
established. Community need can be
demonstrated through the following.
-10-
• A community needs assessment
developed or accessed by the
organization.
• Documentation that demonstrated
community need or a request from a
public 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.
Community benefit activities or
programs also seek to achieve objectives,
including improving access to health
services, enhancing public health,
advancing generalizable knowledge, and
relief of government burden. 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 ceased to exist 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 health care among different
populations.
• Leverage or enhance public health
department activities such as childhood
immunization efforts.
• Otherwise would become the
responsibility of government or another
tax-exempt organization.
• Advance generalizable knowledge
through education or research that
benefits the public.
Lines 1a through 1j, column (A). Enter
the name of each reported community
health improvement activity or program
and total community benefit expense for
each. Include both direct costs and
indirect costs in total community benefit
expense. Use additional worksheets if the
organization reports more than 10
community health improvement activities
or programs.
Lines 3a through 3d, column (A).
Enter the name of each reported
community benefit operations activity or
program and total community benefit
expense for each. Include both direct
costs and indirect costs in total
community benefit expense. Use
additional worksheets if the organization
reports more than four community benefit
operations activities or programs.
Report total community benefit
expense, direct offsetting revenue, and
net community benefit expense for each
line item.
Page 11 of 15
Instructions for Schedule H (Form 990)
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Worksheet 4. Community Health Improvement Services and Community
Benefit Operations (Part I, line 7e)
Keep for Your Records
(A)
Total
community
benefit
expense
(B)
Direct
offsetting
revenue
(C)
Net community
benefit expense
(subtract col. (B)
from col. (A) for
lines 1 – 5)
1. Community health improvement services
a.
1a.
b.
1b.
c.
1c.
d.
1d.
e.
1e.
f.
1f.
g.
1g.
h.
1h.
i.
1i.
j.
1j.
2. Worksheet subtotal (add lines 1a through 1j) . . . . . . . . . . . . . . . . .
2.
3. Community benefit operations
a.
3a.
b.
3b.
c.
3c.
d.
3d.
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) and include the organization’s share of joint venture
expenses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
7. Percent of total expense (line 5, column (C) divided by line 6; enter
amount on Part I, line 7e, column (f) . . . . . . . . . . . . . . . . . . . . . . . .
7.
Worksheet 5. Health
Professions Education
(Part I, Line 7f)
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
-11-
%
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.
Page 12 of 15
Instructions for Schedule H (Form 990)
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Activity or
Program
Scholarships
for community
members
Scholarships
for staff
members
Report
Yes
No
Continuing
medical
education for
community
physicians
Yes
Continuing
medical
education for
own medical
staff
No
Nurse
education if
graduates are
free to seek
employment
at any
organization
Yes
Nurse
education if
graduates are
required to
become the
organization’s
employees
No
Example
Rationale
Worksheet 5.
More benefit
to community
than
organization
Health Professions
Education (Part I, line
7f)
Totals
More benefit
to
organization
than
community
Total community benefit expense
Accessible to
all qualified
physicians
Restricted to
own medical
staff members
Keep for Your Records
1. Medical students . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
2. Interns, residents, and fellows . . . . . . . . . . . . . . . . . . . .
2.
3. Nursing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
4. Other allied health professions . . . . . . . . . . . . . . . . . . . .
4.
5. Continuing health professions education . . . . . . . . . . . . .
5.
6. Other students . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
7. Total community benefit expense (add lines 1 through 6;
enter on Part I, line 7f, column (c)) . . . . . . . . . . . . . . . . .
7.
Direct offsetting revenue
More benefit
to community
than
organization
Program
designed
primarily to
benefit the
organization
Lines 1 through 6. Include both direct
and indirect costs. Direct costs of health
professions education do not include
costs related to Ph.D. students and
post-doctoral students, which are to be
reported on Worksheet 7, Research.
Refer to the instructions for Part I, line 7,
column (c) for the definition of “indirect
costs.” “Indirect costs” do not include the
estimated cost of “indirect medical
education. ”
Direct costs of health professions
education include the following.
• 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 of medical
students.
• Salaries and fringe benefits of faculty
directly related to teaching of 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.
• Salaries and fringe benefits of faculty
directly related to teaching of 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,
8. Medicare reimbursement for direct GME . . . . . . . . . . . . .
8.
9. Medicaid reimbursement for direct GME . . . . . . . . . . . . .
9.
10. Continuing health professions education reimbursement/
tuition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.
11. Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.
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), and include the organization’s share of joint
venture expenses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.
15.
Percent of total expense (line 13 divided by line 14; enter
amount on Part I, line 7f, column (f)) . . . . . . . . . . . . . . . .
including, but not limited to, programs in
pharmacy, occupational therapy,
dietetics, and pastoral care.
• Salaries and fringe benefits of faculty
for teaching 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.
Line 8. Enter Medicare reimbursement
for direct GME, reimbursement for
approved nursing and allied health
education activities, and direct GME
reimbursement received for services
provided to Medicare Advantage patients.
For a children’s hospital that receives
children’s GME payments from Health
Resources and Services Administration
(HRSA), count that portion of the payment
equivalent to Medicare direct GME. Do
not include indirect GME reimbursement
provided by Medicare.
Line 9. Enter Medicaid reimbursement
for direct GME, including only that portion
of Medicaid GME payment equivalent to
-12-
15.
%
Medicare GME and that can be explicitly
segregated by the organization from other
Medicaid net patient revenue. Do not
include indirect GME reimbursement
provided by Medicaid, which is to be
reported on Worksheet 3, Unreimbursed
Medicaid and Other Means-Tested
Government Programs. Include Medicaid
reimbursement for nursing and allied
health education. If your state pays
Medicaid GME reimbursement as a lump
sum that includes both direct and indirect
payments, use reasonable methods to
estimate the portion of the lump sum that
is direct (for example, the percent of total
Medicare GME payments that is direct).
Line 10. Enter revenue received for
continuing health professions education
reimbursement or tuition.
Line 11. Enter other revenue received
for continuing health professions
education activities.
Worksheet 6. Subsidized
Health Services (Part I,
Line 7g)
Worksheet 6 can be used to calculate the
net cost of subsidized health services.
Page 13 of 15
Instructions for Schedule H (Form 990)
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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, measured by cost, associated
with bad debt, charity care, 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 service measured by
cost. For column (C), enter amounts
attributable to the subsidized health
service for patients who are recipients of
Medicaid and other means-tested
government programs measured by cost.
For column (D), enter charity care
amounts attributable to the subsidized
health service measured by cost. Multiply
line 1 by line 2 or enter estimated cost
based on the organization’s cost
accounting. Organizations with a cost
accounting system or a cost accounting
method more accurate than the ratio of
patient care cost to charges from
Worksheet 2 can rely on that system or
method to estimate the cost of each
subsidized health service.
Subsidized health services generally
include qualifying inpatient programs such
as neonatal intensive care, addiction
recovery, and inpatient psychiatric units,
and ambulatory programs such as
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 by 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
physician clinics 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.
Worksheet 7. Research
(Part I, Line 7h)
Worksheet 7 can be used to report the
net cost of research conducted by the
organization.
Research means any study or
investigation the goal of which is to
generate generalizable knowledge made
available to the public such as knowledge
about underlying biological mechanisms
of health and disease, natural processes,
Line 3, columns (A) through (D). Enter
the estimated cost for each subsidized
health service. For column (B), enter bad
debt amounts attributable to the
Worksheet 6. Subsidized Health Services (Part I, line 7g)
Keep for Your Records
(A)
Total
subsidized
health
service
program
(C)
Medicaid and
other
(D)
means-tested Charity care
government
programs
(B)
Bad debt
(E)
Totals
(subtract
columns (B),
(C), and (D)
from column
(A))
Program name: ______________________________
1. Gross patient charges from program(s) . . . . . . . . . .
1.
Total community benefit expense
2. Ratio of patient cost to charges (from Worksheet 2, if
used) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
3. Cost (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.
5. Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . .
5.
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.
8. Total expense (enter amount from Form 990, Part IX,
line 25, column (A), and include the organization’s
share of joint venture expenses) . . . . . . . . . . . . . .
8.
9. Percent of total expense (line 7, column (E) divided
by line 8; enter on Part I, line 7g, column (f)) . . . . . .
9.
$
%
-13-
Page 14 of 15
Instructions for Schedule H (Form 990)
10:52 - 28-JAN-2010
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Worksheet 7. Research (Part I, line 7h)
Keep for Your Records
Total community benefit expense
1. Direct costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
2. Indirect costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
3. Total community benefit expense (add lines 1 and 2; enter on Part I, line 7h, column (c)) . . . . . . . .
3.
4. Direct offsetting revenue (enter on Part I, line 7h, column (d)) . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. Net community benefit expense (subtract line 4 from line 3; enter on Part I, line 7h, column (e))
5.
6. Total expense (enter amount from Form 990, Part IX, line 25, column (A), and include the
organization’s share of joint venture expenses.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
7. Percent of total expense (divide line 5 by line 6; enter on Part I, line 7h, column (f)) . . . . . . . . . . . .
7.
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, the 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, HIPAA,
etc.); and dissemination of research
results.
Line 1. Define direct costs pursuant to
guidelines and definitions published by
the National Institutes of Health.
Line 2. Define indirect costs pursuant to
guidelines and definitions published by
the National Institutes of Health.
Worksheet 8. Cash and
In-Kind Contributions to
Community Groups (Part I,
Line 7i)
Worksheet 8 can be used to report cash
contributions or grants and the cost of
in-kind contributions that support charity
care, health professions education, and
other community benefit activities
reportable in Part I, lines 7a through 7h.
Report such contributions on line 7i,
rather than on lines 7a through 7h. Do not
include any contributions funded in whole
or in part by a restricted grant, to the
extent that such grant was from a related
Worksheet 8.
organization, as illustrated in the
examples on page 15.
“Cash and in-kind contributions”
means contributions made by the
organization to health care organizations
and other community groups restricted 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.
Cash and In-Kind
Donations to
Community Groups
(Part I, line 7i)
Keep for Your Records
(A)
Cash
contributions
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.
4. Total expense (enter amount from
Form 990, Part IX, line 25, column
(A), and include the organization’s
share of joint venture expenses) . . .
4.
5. Percent of total expense (divide
line 3 by line 4; enter on Part I, line
7i, column (f)) . . . . . . . . . . . . . . . .
5.
-14-
%
(B)
In-kind
contributions
(C)
Total
%
Page 15 of 15
Instructions for Schedule H (Form 990)
10:52 - 28-JAN-2010
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
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; 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.
Special rule for grants to joint
ventures. 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 benefit
activities reportable in the table, in Part I,
line 7, report the grant on line 7i, but do
not include the organization’s
proportionate share of the amount spent
by the joint venture on such activities in
any other part of the Table, to avoid
double-counting.
Example 1. The filing organization
(A) and foundation (B) are related
organizations. B makes a grant to A that
must be used by A to conduct a
community needs assessment in a
community served by A. A can report the
cost of conducting the community needs
assessment in Part I, line 7e, column (c)
in the year it conducts the needs
assessment, but A need not report the
restricted grant from B in Part I, line 7e,
column (d). The same result is obtained if
B is unrelated to A, or if the grant is
unrestricted rather than required to be
used by A to provide community benefit.
Example 2. Use the same facts as in
Example 1, except A may also use the
grant from B to make a grant to another
organization (C), which must be used by
C to provide community benefit. A makes
such a grant to C. A cannot report the
grant to C in Part I, line 7i, because it is
funded by a related organization, but A
need not report the grant from B in Part I,
line 7, column (d) for any line 7 item. This
is the result regardless of whether B and
C are related organizations.
-15-
Example 3. A is a related
organization with respect to each of B, C,
and D. Each of the organizations files a
Form 990 and a Schedule H (Form 990).
A makes a restricted grant to B that is
restricted to one or more of the
community benefit activities described in
the table in Part I, line 7 (and the related
worksheets and instructions). A’s grant is
not funded by a related organization. B
makes a restricted grant to C that is
funded by A’s restricted grant. C makes
an unrestricted grant to D that is funded
by B’s restricted grant. Under these
circumstances, A can report the grant to
B on A’s Schedule H (Form 990), Part I,
line 7i, but neither B nor C can report their
respective grants to C and D on Part I,
line 7i of their own Schedule H (Form
990). If D uses the grant funds to make a
grant restricted to one or more of the
community benefit activities described in
the Table in Part I, D can report the grant
on line 7i.
| File Type | application/pdf |
| File Title | 2009 Instruction 990 Schedule H |
| Subject | Instructions for Schedule H (Form 990), Hospitals |
| Author | W:CAR:MP:FP |
| File Modified | 2010-02-01 |
| File Created | 2010-02-01 |