990 Schedule H Instructions for Schedule H (Form 990)

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2023

Instructions for Schedule H
(Form 990)

Department of the Treasury
Internal Revenue Service

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Hospitals

Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to Form
990 and its instructions, such as legislation enacted after they
were published, go to IRS.gov/Form990.

General Instructions

Background. The Patient Protection and Affordable Care Act
(Affordable Care Act), enacted March 23, 2010, P.L. No.
111-148, added section 501(r) to the Code. Section 501(r)
includes additional requirements a hospital organization must
meet to qualify for tax exemption under section 501(c)(3) in tax
years beginning after March 23, 2010. These additional
requirements address a hospital organization's financial
assistance policy (FAP); policy relating to emergency medical
care; billing and collections; and charges for medical care. Also,
for tax years beginning after March 23, 2012, the Affordable
Care Act requires hospital organizations to conduct community
health needs assessments.
Because section 501(r) requires a hospital organization to
meet these requirements for each of its hospital facilities, Part
V, Facility Information, has been expanded to include a
Section A, Hospital Facilities. In this section, a hospital
organization must list its hospital facilities; that is, its facilities
that, at any time during the tax year, were required to be
licensed, registered, or similarly recognized as a hospital under
state law. Part V also includes Section B, Facility Policies and
Practices, for reporting of information on policies and practices
addressed in section 501(r). The hospital organization must
complete a separate Section B for each of its hospital facilities or
facility reporting groups listed in Section A.
Section 6033(b)(15)(B) also requires hospital organizations to
submit a copy of their audited financial statements to the IRS.
Accordingly, a hospital organization that is required to file Form
990 must attach a copy of its most recent audited financial
statements to its Form 990. If the organization was included in
consolidated audited financial statements but not separate
audited financial statements for the tax year, then it must attach a
copy of the consolidated financial statements, including details
of consolidation. See the Instructions for Form 990, Part IV,
line 20b.
Part V, Section D, requires an organization to list all of its
non-hospital health care facilities that it operated during the tax
year, whether or not such facilities were required to be licensed
or registered under state law. The organization shouldn't
complete Part V, Section B, for any of these non-hospital
facilities.
Sec. 501(r) final regulations are effective for tax years

Oct 3, 2023

Who Must File

An organization that answered “Yes” on Form 990, Part IV,
line 20a, must complete and attach Schedule H to Form 990.

Note. Terms in bold are defined in the Glossary of the
Instructions for Form 990.

TIP beginning after 12/29/15.

Purpose of Schedule

Hospital organizations use Schedule H (Form 990) to provide
information on the activities and policies of, and community
benefit provided by, its hospital facilities and other non-hospital
health care facilities that it operated during the tax year. This
includes facilities operated either directly or through disregarded
entities or joint ventures.

Schedule H (Form 990) must be completed by a hospital
organization that operated at any time during the tax year at
least one hospital facility. A hospital facility is one that is
required to be licensed, registered, or similarly recognized by a
state as a hospital. A hospital organization may treat multiple
buildings operated by a hospital organization under a single
state license as a single hospital facility.
The organization must file a single Schedule H (Form 990)
that combines information from:
1. Hospital facilities directly operated by the organization.
2. Hospital facilities operated by disregarded entities of
which the organization is the sole member.
3. Other health care facilities and programs of the hospital
organization or any of the entities described in 1 or 2, even if
provided separately from the hospital's license.
4. Hospital facilities and other health care facilities and
programs operated by any joint venture treated as a
partnership, to the extent of the hospital 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) isn't 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 hospital
organization, hospital facilities operated directly by members of
the group exemption included in the group return, hospital
facilities operated by a disregarded entity of which a member
included in the group return is the sole member, hospital facilities
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 health care facilities or
programs of a member included in the group return even if such
programs are provided separately from the hospital's license.
Example. The organization is the sole member of a
disregarded entity. The disregarded entity owns 50% of a joint

Cat. No. 51526B

assistance at its hospital(s) and other facilities, if any. Financial
assistance includes free or discounted health services provided
to persons who meet the organization's criteria for financial
assistance and are unable to pay for all or a portion of the
services. Financial assistance doesn't include: bad debt or
uncollectible charges that the organization recorded as revenue
but wrote off due to a patient's failure to pay, 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; self-pay or prompt pay discounts; or
contractual adjustments with any third-party payers.

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 isn't
part of the hospital's license. (Assume the 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 combined information on
Schedule H (Form 990).

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Note that while information from all the above sources is
combined for purposes of Schedule H (Form 990), the
organization is required to list and provide information regarding
each of its hospital facilities in Part V, Sections A, B, and C,
whether operated directly by the organization or through a
disregarded entity or joint venture treated as a partnership. In
addition, the organization must list in Part V, Section D, each of
its other health care facilities (for example, rehabilitation clinics,
other outpatient clinics, diagnostic centers, skilled nursing
facilities) that it operated during the tax year, whether operated
directly by the organization or through a disregarded entity or a
joint venture treated as a partnership.

Line 2. Check only one of the three boxes. “Applied uniformly to
all hospitals” means that all of the organization's hospital
facilities use the same FAP. “Applied uniformly to most
hospitals” means that the majority of the organization's hospital
facilities use the same FAP. “Generally tailored to individual
hospitals” means that the majority of the organization's hospital
facilities use different financial assistance policies. If the
organization operates only one hospital facility, check “Applied
uniformly to all hospitals.”

Organizations aren't to enter 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 may be
described in Part VI.

Line 3. Answer lines 3a, 3b, and 3c, based on the financial
assistance 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 doesn't operate its own
hospital facility, the largest number of patients of a hospital
facility operated by a joint venture in which the organization has
an ownership interest. For example, if the organization has two
hospital facilities, use the financial assistance eligibility criteria
used by the hospital facility that has the most patient contacts or
encounters during the tax year.
Line 3a. “Federal Poverty Guidelines” (FPG) are the Federal
Poverty Guidelines published annually by the U.S. Department of
Health and Human Services. If the organization has established
a family or household income threshold that a patient must meet
or fall below to qualify for free medical care, check the box in the
“Yes” column and indicate the specific threshold by checking the
appropriate box. For instance, if a patient's family or household
income must be less than or equal to 250% of FPG for the
patient to qualify for free care, then check the box marked
“Other” and enter “250%.”
Line 3b. If the organization has established a family or
household income threshold that a patient must meet or fall
below to qualify for discounted medical care, check the box in
the “Yes” column and indicate the specific threshold by checking
the appropriate box.
Line 3c. If applicable, describe the other criteria used, such
as asset test or other means test or threshold for free or
discounted care, on 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.

Except as provided in Part IV, don't 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 affiliated with or otherwise related to the
organization (for example, part of an affiliated health care
system).
If an organization isn't 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 didn't operate one or more facilities
during the tax year that satisfy the definition of hospital facility
above shouldn't file Schedule H (Form 990).
The definition of “hospital” for Schedule A (Form 990),

TIP Public Charity Status and Public Support, Part I, line 3,

and the definition of “hospital” for Schedule H (Form
990) aren't the same. Accordingly, an organization that checks
box 3 in Part I of Schedule A (Form 990) to enter 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 facility for purposes of Schedule H (Form
990), as explained above.

Specific Instructions
Part I. Financial Assistance and
Certain Other Community Benefits at
Cost

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 FAP.

Part I requires reporting of financial assistance policies, the
availability of community benefit reports, and the cost of financial
assistance and other community benefit activities and programs.
Worksheets and accompanying instructions are provided at the
end of the instructions to this schedule to assist in completing
the table in Part I, line 7.

Line 5. Answer lines 5a, 5b, and 5c based on the organization's
budgeted amounts under its FAP.
Line 5a. Answer “Yes” if the organization established or had
in place at any time during the tax year an annual or periodic

Line 1. An FAP, sometimes referred to as a charity care policy, is
a policy describing how the organization will provide financial
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Instructions for Schedule H

calculating the amount entered on line 7, column (f), enter this
bad debt expense on Part VI, line 1.
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 entered on the
line. Enter each activity and program on only one line so that it
isn't counted more than once. Entering 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 entered in
multiple rows, as services across different categories may be
provided to the same patient. Entering 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 administrative costs related to the organization's
infrastructure (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.

budgeted amount of free or discounted care to be provided
under its FAP. 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 FAP or under any of its hospital facilities' financial
assistance policies because the organization's or the facility's
financial assistance budget was exceeded.

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Line 6. Answer lines 6a and 6b based on the community benefit
report that the organization prepared for the organization as a
whole during the tax year.
Line 6a. Answer “Yes” if the organization prepared a written
report during the tax year that describes the organization's
programs and services that promote the health of the community
or communities served by the organization. If the organization's
community benefit report is contained in a report prepared by a
related organization, answer “Yes” and identify the related
organization on Part VI, line 1. If “No,” skip to line 7.
Line 6b. Answer “Yes” if the organization made the
community benefit report it prepared during the tax year
available to the public.
Examples of how an organization can make its

TIP community benefit report available to the public are to

post the report on the organization's website and to
make a paper copy of the community health needs assessment
(CHNA) report available for public inspection upon request and
without charge at the hospital facility.

Lines 7a through 7k. Enter on the table (lines 7a through 7k),
at cost, the organization's financial assistance (as defined in the
instructions for line 1) and certain other community benefits (as
defined in the instructions to Worksheets 1-8). Enter on line 7i
contributions that the organization restricts, in writing, to one or
more of the community benefit activities listed on lines 7a
through 7h. Don't enter such contributions on lines 7a through
7h. To calculate the amounts to be entered on the table, use the
worksheets or other equivalent documentation that substantiates
the information entered consistent with the methodology used on
the worksheets. Don't include bad debt in these amounts. Bad
debt will be entered in Part III.

“Direct offsetting revenue” also includes restricted grants or
contributions that the organization uses to provide a community
benefit, such as a restricted grant to provide financial assistance
or fund research. “Direct offsetting revenue” doesn't include
unrestricted grants or contributions that the organization uses to
provide a community benefit. Organizations may describe any
inconsistencies from reporting in prior years in Part VI.
Examples. The organization receives a restricted grant from
an unrelated organization that must be used by the organization
to provide financial assistance. The amount of the restricted
grant is entered as direct offsetting revenue on line 7a, column
(d).
The organization receives an unrestricted grant from an
unrelated organization. The organization decides to use the
grant to increase the amount of financial assistance it provides.
The amount of the unrestricted grant isn't entered as direct
offsetting revenue on line 7a, column (d).
Columns (e) and (f). Don't enter negative numbers. If the
net community benefit expense is less than $0, enter “0.”
Similarly, don't enter a negative percent in column (f), but enter
“0.”
Group return filers. The “total expense” denominator for
purposes of determining the percent of total expense for column
(f) is the amount entered on Form 990, Part IX, line 25, column
(A), of the group return.

If the organization completed worksheets other than on a

TIP combined basis (for example, facility by facility, joint

venture by joint venture), the organization should
combine all information from these worksheets for purposes of
entering 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 entered 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 entered 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 entered on
the table.
If the organization included any costs for a physician clinic as
subsidized health services on Part I, line 7g, enter 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

Instructions for Schedule H

Column (f) “percent of total expense” is based on

TIP column (e) “net community benefit expense,” rather than

column (c) “total community benefit expense.”
Organizations that enter amounts of direct offsetting revenue
might also wish to enter total community benefit expense (Part I,
line 7, column (c)) as a percentage of total expenses. Although
this percentage cannot be entered on Part I, line 7, column(f), it
can be entered on Schedule H (Form 990), Part VI, line 1.

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Worksheets for Part I, Line 7
(Financial Assistance and Certain
Other Community Benefits at Cost)

vulnerable populations and creating new employment
opportunities in areas with high rates of joblessness.
Line 3. “Community support” can include, but isn't limited to,
child care and mentoring programs for vulnerable populations or
neighborhoods, 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.

Worksheets 1 through 8 give the definitions of community benefit
to be used in completing Schedule H (Form 990), Part I, lines 7a
through 7k. Use of the worksheets isn't required, and 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 enter the required
information, such documentation should not be filed with Form
990 but must be retained by the organization to substantiate the
information entered 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.

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Line 4. “Environmental improvements” include, but aren't 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 can not 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 can not 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, unless the expenditures are for an environmental
improvement activity that
1. is provided for the primary purpose of improving
community health;
2. addresses an environmental issue known to affect
community health; and
3. is subsidized by the organization at a net loss.

If the organization is filing a group return or has a disregarded
entity or an ownership interest in one or more joint ventures,
the organization may find it helpful to complete the worksheets
separately for the organization and for each disregarded entity,
joint venture in which the organization had an ownership interest
during the tax year, and group affiliate. In that case, the
organization should combine all information from the worksheets
for purposes of completing line 7. Complete the table by
combining amounts from the organization's worksheets,
amounts from disregarded entities or group affiliates, and
amounts from joint ventures that are attributable to the
organization's proportionate share of each joint venture, under
the aggregation instruction in Purpose of Schedule.

An expenditure may not be entered on this line if the
organization engages in the activity primarily for marketing
purposes.

See Worksheets 1 through 8 and specific instructions for the
worksheets later in these instructions.

Part II. Community Building Activities

Line 5. “Leadership development and training for community
members” includes, but isn't limited to, training in conflict
resolution; civic, cultural, or language skills; and medical
interpreter skills for community residents.

Enter 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 aren't entered in Part I of
this schedule. Some community building activities may also
meet the definition of a community health improvement service,
as defined in Worksheet 4. Don't enter in Part II community
building costs that are entered on Part I, line 7e. An organization
that enters information in this Part II must describe in Part VI how
its community building activities promote the health of the
communities it serves.

Line 6. “Coalition building” includes, but isn't 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” includes,
but isn't limited to, efforts to support policies and programs to
safeguard or improve public health, access to health care
services, housing, the environment, and transportation.

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, enter the grant on
the appropriate line in Part II, but don't include in Part II the
organization's proportionate share of the amount spent by the
joint venture on such activities to avoid double counting.

Line 8. “Workforce development” includes, but isn't 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 entered on
Part I, line 7f).
Line 9. “Other” refers to community building activities that
protect or improve the community's health or safety that aren't
described in the categories listed on lines 1 through 8 above.
Examples might include, but are not limited to, spending on food
security, nutrition, and other social determinants of health.
Refer to the instructions to Part I, line 7, columns (a) through
(f), for descriptions of the types of information that should be
entered 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

Line 1. “Physical improvements and housing” include, but aren't
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 isn't limited to,
assisting small business development in neighborhoods with
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Instructions for Schedule H

debt expense or “accounts receivable,” “allowance for doubtful
accounts,” or similar designations, provide the exact wording of
the footnote or footnotes, or enter the page number(s) in which
the footnote or footnotes appear in the attached audited financial
statements.
If the organization's financial statements include a footnote on
these issues that also includes other information, enter in Part VI
only the relevant portions of the footnote. If the organization is a
member of a group with consolidated financial statements, the
organization can summarize that portion, if any, of the footnote or
footnotes that apply. If the organization's financial statements
don't include a footnote that discusses bad debt expense,
“accounts receivable,” "allowance for doubtful accounts," or
similar designations, include a statement in Part VI that the
organization's audited financial statements don't include a
footnote discussing these issues and explain how the
organization's financial statements account for bad debt, if at all.

venture in which the organization had an ownership interest
during the tax year, and group affiliate. The organization should
combine the amounts from all such tables, according to the
combined instructions in Purpose of Schedule, and include the
combined information in Part II.

Part III. Bad Debt, Medicare, and
Collection Practices

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Section A

In this section,(a) enter combined bad debt expense; (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 the organization’s FAP; and (c)
provide a rationale for what portion of bad debt, if any, the
organization believes is community benefit. In addition, the
organization must enter whether it has adopted Healthcare
Financial Management Association Statement No. 15, Valuation
and Financial Presentation of Charity Care, Implicit Price
Concessions and Bad Debts by Institutional Healthcare
Providers (“Statement 15”), and provide the text or page number
of its footnote, if applicable, to its audited financial statements
that describe the bad debt expense.

Section B

In this section, (a) combine allowable costs to provide services
reimbursed by Medicare (don't include community benefit costs
included on Part I, line 7), (b) combine Medicare
reimbursements attributable to such costs, and(c) combine
Medicare surplus or shortfall. Include in Section B only those
allowable costs and Medicare reimbursements that are reported
in the organization's Medicare Cost Report(s) for the year,
including its share of any such allowable costs and
reimbursement from disregarded entities and joint ventures
in which it has an ownership interest. Don't include any
Medicare-related expenses or revenue properly entered on Part
I, line 7f or 7g.

Line 1. Indicate if the organization enters bad debt expense in
accordance with Statement 15.

Note. Statement 15 hasn't been adopted by the American
Institute of Certified Public Accountants (AICPA). The IRS
doesn't require organizations to adopt Statement 15 or use it to
determine bad debt expense or financial assistance costs. Some
organizations may rely on Statement 15 in reporting bad debt
expense and financial assistance in their audited financial
statements. Statement 15 provides instructions for
recordkeeping, valuation, and disclosure for bad debts.

In Part VI, the organization should describe what portion of its
Medicare shortfall, if any, it believes should constitute community
benefit, and explain its rationale for its position. As described
below, the organization can also enter in Part VI the amount of
any Medicare revenues and costs not included in its Medicare
Cost Report(s) for the year, and can enter a reconciliation of the
amounts entered in Section B (including the surplus or shortfall
entered on line 7) and the total revenues and costs attributable
to all of the organization's Medicare programs.

Line 2. Use the most accurate system and methodology
available to the organization to enter bad debt expense. If only a
portion of a patient’s bill for services is written off as a bad debt,
include only the proportionate amount attributable to the bad
debt. Include the organization’s proportionate share of the bad
debt expense of joint ventures in which it had an ownership
interest during the tax year.
Describe in Part VI the methodology used in determining the
amount entered on line 2 as bad debt, including how the
organization accounted for discounts and payments on patient
accounts in determining bad debt expense.

Line 5. Enter all net patient service revenue (for Medicare fee
for service (FFS) patients) associated with the allowable costs
the organization entered 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 deductible, outliers, capital, bad debt, and any other
amounts paid to the organization on the basis of its Medicare
Cost Report. Don't include revenue related to subsidized health
services as entered on Part I, line 7g (see Worksheet 6),
research as entered on Part I, line 7h (see Worksheet 7), or
direct graduate medical education (GME) as entered on Part I,
line 7f (see Worksheet 5). If the organization has more than one
Medicare provider number, combine the revenue attributable to
costs reported on the Medicare Cost Report(s) submitted under
each provider number, and enter the combined revenues on
line 5.

Line 3. Provide an estimate of the amount of bad debt entered
on line 2 that reasonably is attributable to patients who likely
would qualify for financial assistance under the hospital's FAP
as entered on Part I, lines 1 through 4, but for whom insufficient
information was obtained to determine their eligibility. Don't
include this amount in Part I, line 7. Organizations can use
any reasonable methodology to estimate this amount, such as
record reviews, an assessment of financial assistance
applications that were denied due to incomplete documentation,
analysis of demographics, or other analytical methods.
Describe in Part VI the methodology used to determine the
amount entered on line 3 and the rationale, if any, for including
any portion of bad debt as community benefit.

Line 6. Enter all Medicare allowable costs reported in the
organization's Medicare Cost Report(s), except those already
entered on line 7g, Part I (subsidized health services), and costs
associated with direct GME already entered on line 7f, Part I
(health professions education). This can be determined using
Worksheet A. If Worksheet A isn't used, the organization still
must subtract the costs attributable to subsidized health services
and direct GME from the Medicare allowable costs it enters on
line 6. If the organization has more than one Medicare provider
number, it should combine the costs reported in the Medicare

Line 4. In Part VI, provide the footnote from the organization's
audited financial statements on bad debt expense, if
applicable, or the footnotes related to “accounts receivable,”
“allowance for doubtful accounts,” or similar designations.
Alternatively, enter the page number(s) on which the footnote or
footnotes appear in the organization's most recent audited
financial statements, which must be attached to this return. If the
footnote or footnotes address only the filing organization's bad
Instructions for Schedule H

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patients who the organization knows qualify for financial
assistance. If the organization answers “Yes,” describe in Part VI
the collection practices that it follows for such patients, whether
or not such practices apply specifically to such patients or more
broadly to also cover other types of patients.

Cost Report(s) submitted under each provider number and enter
the combined costs on line 6.

Worksheet A (Optional)

Complete Worksheets 5 and 6 before completing this Worksheet
A.

1.
2.
3.
4.
5.

Part IV. Management Companies and
Joint Ventures Owned 10% or More
by Officers, Directors, Trustees, Key
Employees, and Physicians

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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. . . . . . . . . . . .

$

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 the corporation:
a. Persons who were officers, directors, trustees, or key
employees of the organization at any time during the
organization's tax year, and/or
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.

$
$
$
$

Line 7. Subtract line 6 from the amount on line 5. If line 6
exceeds line 5, enter the surplus (the shortfall) as a negative
number.

Lines 5, 6, and 7 don't include certain Medicare program

TIP 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 the 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 on Part VI, line 1, a
reconciliation of amounts entered in Section B (including the
surplus or shortfall entered on line 7) and all of the organization's
total revenues and total expenses attributable to Medicare
programs.

Examples of such joint ventures and management companies
include:
• An ancillary joint venture formed by the organization and its
officers or physicians to conduct an exempt or unrelated
business activity,
• A company owned by the organization and its officers or
physicians that owns and leases to the organization a hospital or
other medical care facility, and
• A company that owns and leases to entities other than the
organization’s diagnostic equipment or intellectual property used
to provide medical care.

Line 8. Check the box that best describes the costing
methodology used to enter the Medicare allowable costs on
line 6. Describe this methodology in Part VI.
The organization must also describe in Part VI its rationale for
treating the amount entered on Part III, line 7, or any portion of it,
as a community benefit. An organization's rationale must have a
reasonable basis. Don't include this amount on Part I, line 7.
If the organization received any prior year settlements for
Medicare-related services in the current tax year, it can provide
an explanation on Part VI, line 1.

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. Don't include publicly traded entities or entities whose
sole income is passive investment income from interest or
dividends.

Section C

In this section, enter the organization's written debt collection
policy.

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.

Line 9a. Answer “Yes” if the organization had a written debt
collection policy on the collection of amounts owed by patients
during its tax year.
For purposes of line 9a, a “written debt collection policy”
includes a written billing and collections policy, or in the case of
an organization that doesn't have a separate written billing and
collections policy, a written FAP that includes the actions the
organization may take in the event of non-payment, including
collection actions and reporting to credit agencies.

Column (a). Enter the full legal name of the entity.

Line 9b. Answer “Yes” if the organization's written debt
collection policy that applied to the facilities that served the
largest number of the organization's patients during the tax year
contained provisions for collecting amounts due from those

Column (b). Describe the primary business activity or activities
conducted by the management company, joint venture, or
separate entity.
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Instructions for Schedule H

“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.

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.

“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.

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 the
physician’s profits or stock percentage in column (d). Don't
include this in column (e).
Part IV can be duplicated if more space is needed to list
additional management companies and joint ventures.

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“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 hospital
facility that the organization operates that isn't described in the
other columns of Part V, Section A.

Part V. Facility Information

In the upper left-hand corner of the Part V, Section A, table,
list the total number of hospital facilities that the organization
operated during the tax year.

In Part V, the organization must list all of its hospital facilities in
Section A, complete separate Sections B and C for each of its
hospital facilities or facility reporting groups listed in Section A,
and list its non-hospital health care facilities in Section D.

If the organization needs additional space to list all of its
hospital facilities, it should duplicate Section A and use as many
duplicate copies of Section A as needed, number each page,
and renumber the line numbers in the left-hand margin (an
organization with 15 facilities should renumber lines 1–5 on the
second page as lines 11–15).

Facility reporting groups. If the organization is able to check
the same checkboxes for all Part V, Section B, questions for
more than one of its hospital facilities, it may file a single
Section B and Section C for all facilities in that facility reporting
group. For each of those facilities, the organization would assign
and list the facility reporting group letter in the “Facility reporting
group” column in Section A. Assign letter A to the facility
reporting group with the greatest number of facilities, letter B to
the group with the second greatest number of facilities, and so
forth. For instance, three hospital facilities with identical answers
to the Section B checkboxes would be assigned facility group
letter A, while two other hospital facilities with identical answers
would be assigned facility group letter B.

Section B

Section B requires reporting on a hospital facility by hospital
facility basis. The organization must complete a Section B for
each of its hospital facilities or facility reporting groups listed in
Section A. At the top of each page of Section B, list the name of
the hospital facility or the facility reporting group letter. In the
space provided, list the line number of the hospital facility, or line
numbers of the hospital facilities in a facility reporting group
(from Part V, Section A).

Section A

If the organization could check the same checkboxes for all
Part V, Section B, questions for more than one of its hospital
facilities, it may file a single Section B for all facilities in that
facility reporting group.

Complete Part V, Section A, by listing all of the organization's
hospital facilities that it operated during the tax year. List
these facilities in order of size from largest to smallest, measured
by a reasonable method (for example, the number of patients
served or total revenue per facility). “Hospital facilities” are
facilities that, at any time during the tax year, were required to be
licensed, registered, or similarly recognized as a hospital under
state law. A hospital facility is operated by an organization
whether the facility is operated directly by the organization or
through a disregarded entity or joint venture treated as a
partnership. For each hospital facility, list its name, address,
primary website address, and state license number (and if a
group return, the name and employer identification number (EIN)
of the subordinate hospital organization that operates the
hospital facility), and check the applicable column(s).

References in these Section B instructions to a “hospital
facility” taking a certain action mean that the hospital
organization took action through or on behalf of the hospital
facility.
Line 1. Answer “Yes” if the hospital facility was first licensed,
registered, or similarly recognized by a state as a hospital facility
in the current tax year or the immediately preceding tax year.
Line 2. Answer “Yes” if the hospital facility was acquired or
placed into service as a tax-exempt hospital in the current tax
year or the immediately preceding tax year. If “Yes,” provide
details in Section C.

“Licensed hospital” is a facility licensed, registered, or
similarly recognized by a state as a hospital.

Lines 3 through 12c. A community health needs assessment
(CHNA) is an assessment of the significant health needs of the
community. To meet the requirements of section 501(r)(3), a
CHNA must take into account input from persons who represent
the broad interests of the community served by the hospital
facility, including those with special knowledge of or expertise in
public health, and must be made widely available to the public.
Each hospital facility must conduct a CHNA at least once
every 3 years, and adopt an implementation strategy to meet the
community health needs identified through such CHNA.

“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.
Instructions for Schedule H

Line 3. Answer “Yes” if the hospital facility conducted a CHNA
in the current tax year or in either of the 2 immediately preceding
tax years. If “Yes,” indicate what the CHNA describes by
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input was provided (for example, whether through meetings,
focus groups, interviews, surveys, or written comments, and
between what dates); the names of any organizations providing
input; and describe the medically underserved, low-income, or
minority populations being represented by organizations or
individuals that provided input. A CHNA report doesn't need to
name or otherwise identify any specific individual providing input
on the CHNA. In the event a hospital facility solicits, but cannot
obtain, input from a source required by line 5, the hospital
facility's CHNA report must also describe the hospital facility's
efforts to solicit input from such source.

checking all applicable boxes. If the CHNA describes information
that doesn't have a corresponding checkbox, check line 3j,
“Other,” and describe this information in Part V, Section C. If “No,”
skip to line 12.
Note. Notice 2020-56 provided a postponement, until
December 31, 2020, of the deadline for performing any CHNA
requirement due to be completed on or after April 1, 2020, and
before December 31, 2020. If you utilized this relief, treat the
completed CHNA as having been completed in the tax year in
which it would have been due in the absence of any relief when
answering line 3 and line 4.
Notice 2022-36, provides relief for certain taxpayers from
certain failure to file penalties and certain international
information return (IIR) penalties with respect to tax returns for
taxable years 2019 and 2020 that are filed on or before
September 30, 2022 . This notice also provides relief from
certain information return penalties with respect to taxable year
2019 returns that were filed on or before August 1, 2020, and
with respect to taxable year 2020 returns that were filed on or
before August 1, 2021.
Hellow Patrick. B. [email protected], Chief
Counsel’s email 9-28-2020.

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Line 6a. Answer “Yes,” if the hospital facility's CHNA was
conducted with one or more other hospital facilities. “One or
more other hospital facilities” includes related and unrelated
hospital facilities. If “Yes,” list in Part V, Section C, the other
hospital facilities with which the hospital facility conducted its
CHNA.
Line 6b. Answer “Yes,” if the hospital facility's CHNA was
conducted with one or more organizations other than hospital
facilities. If “Yes,” list in Part V, Section C, the other organizations
with which the hospital facility conducted its CHNA.
Line 7. Answer “Yes,” if the hospital facility made its most
recently conducted CHNA widely available to the public. If “Yes,”
indicate how the hospital facility made the CHNA widely
available to the public by checking all applicable boxes. If the
hospital facility made the CHNA widely available to the public by
means other than those listed on lines 7a through 7c, check
line 7d, “Other,” and describe these means in Part V, Section C.

Line 3a. Check this box if the CHNA report defines the
community served by the hospital facility and a description of
how the community was determined.

Line 3c. Check this box if the CHNA report describes the
resources potentially available to address the significant health
needs identified through the CHNA, including existing health
care facilities and resources within the community that are
available to respond to the health needs of the community.

Line 7a. Check this box if the CHNA was made available on the
hospital facility’s website or the hospital organization’s website. If
line 7a is checked, list in the space provided the direct website
address, or URL, where the CHNA can be accessed.

Line 3d. Check this box if the CHNA report describes the
process and methods used to conduct the CHNA.

Line 7b. Check this box if the CHNA was made available on a
website other than the hospital facility’s website or the hospital
organization’s website. If line 7b is checked, list in the space
provided the direct website address, or URL, where the CHNA
can be accessed.

Line 3e. In Part V, Section C, indicate if the significant health
needs are a prioritized description of the significant health needs
of the community and identified through the CHNA. If not,
explain how the health needs identified will be prioritized.
Line 3g. Check this box if the CHNA report describes the
process and criteria used in identifying certain health needs as
significant and prioritizing those significant health needs.

Line 7c. Check this box if a paper copy of the CHNA was made
available for public inspection upon request and without charge
at the hospital facility.

Line 3h. Check this box if the CHNA report describes how the
hospital facility solicited and took into account input received
from persons who represent the broad interests of the
community it serves.

Line 8. Answer “Yes” if the hospital facility adopted an
implementation strategy to meet the significant health needs
identified through its most recently conducted CHNA. If “No,”
skip to line 11.

Line 3i. Check this box if the CHNA report describes the
evaluation of the impact of any actions that were taken, since the
hospital facility finished conducting its immediately preceding
CHNA, to address the significant health needs identified in the
hospital facility’s prior CHNA(s).

Line 10. Answer “Yes” if the hospital facility’s most recently
adopted implementation strategy is posted on a website. If “Yes,”
answer line 10a. If “No,” skip to line 10b.
Line 10a. List in the space provided the direct website address,
or URL, where the implementation strategy can be accessed
and skip to line 11.

Line 5. Answer “Yes” if the hospital facility took into account
input from persons who represent the broad interests of the
community served by the hospital facility, including at least one
state, local, tribal, or regional governmental public health
department (or equivalent department or agency), or a State
Office of Rural Health described in section 338J of the Public
Health Service Act (section 254r)), with knowledge, information,
or expertise relevant to the health needs of that community,
members of medically underserved, low-income, and minority
populations in the community served by the hospital facility, or
individuals or organizations serving or representing the interests
of such populations; and written comments received on the
hospital facility's most recently conducted CHNA and most
recently adopted implementation strategy.
If the organization checked “Yes,” summarize in Part V,
Section C, in general terms, how and over what time period such

Line 10b. Answer “Yes” if the hospital facility’s most recently
adopted implementation strategy is attached.
Line 11. Explain in Part V, Section C, how the hospital facility is
addressing the significant needs identified in its most recently
conducted CHNA and any such needs that aren't being
addressed together with the reasons why such needs aren't
being addressed. For example, a hospital facility might identify
limited financial or other resources as reasons why it didn't take
action to address a need identified in its most recently
conducted CHNA.
Line 12a. Answer “Yes” if the organization was liable, at any
time during the tax year, for the $50,000 excise tax incurred
under section 4959 for failure to conduct a CHNA and adopt an
implementation strategy as required under section 501(r)(3).
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Instructions for Schedule H

Section 501(r)(3) requires each hospital facility to conduct a
CHNA, in the tax year or in either of the immediately preceding 2
tax years, that takes into account input from persons who
represent the broad interests of the community served by the
facility, including those with special knowledge of or expertise in
public health, and to make the CHNA widely available to the
public. Section 501(r)(3) also requires each hospital facility to
adopt an implementation strategy to meet the community health
needs identified through its CHNA.

Line 14. Answer “Yes,” if, during the tax year, the hospital
facility had a written FAP that explained the basis for calculating
amounts charged to patients.
Line 15. Answer “Yes,” if, during the tax year, the hospital
facility had a written FAP that explained the method for applying
for financial assistance. If “Yes,” indicate how the hospital
facility’s FAP or FAP application form (including the
accompanying instructions) explained the method for applying
for financial assistance by checking all applicable boxes. If the
FAP explains a method(s) for applying for financial assistance
other than those listed on lines 15a through 15d, check 15e,
“Other,” and explain the method(s) in Part V, Section C.

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Line 12b. Answer “Yes” to line 12b if the organization answered
“Yes” to line 12a and filed Form 4720, Return of Certain Excise
Taxes Under Chapters 41 and 42 of the Internal Revenue Code,
to report the section 4959 excise tax it incurred. Answer “Yes” if
the organization filed Form 4720 during the tax year or after the
tax year but prior to the filing of this return.

Line 15a. Check this box if the hospital facility described all of
the information it may require an individual to provide as part of
the application.

Line 12c. If line 12b is “Yes,” report the total amount of section
4959 excise tax the organization reported on Form 4720 for all of
its hospital facilities that incurred the tax.

Line 15b. Check this box if the hospital facility described all of
the supporting documentation it may require an individual to
submit as part of the application.

Lines 13 through 16. See the instructions for Part I, line 1 of
Schedule H (Form 990), for the definition of “financial assistance
policy (FAP).” Answer “Yes” only if the FAP applies to all
emergency and other medically necessary care provided by the
hospital facility, including all such care provided in the hospital
facility by a substantially related entity.

Line 15c. Check this box if the hospital facility provided
contact information of hospital facility staff that the hospital
facility has identified as an available source of assistance with
FAP applications.
Line 15d. Check this box if the hospital facility provided the
contact information of a nonprofit organization or government
agency that the hospital facility has identified as an available
source of assistance with FAP applications.

Line 13. Answer “Yes,” if, during the tax year, the hospital
facility had a written FAP that explains eligibility criteria for
financial assistance, and whether such assistance includes free
or discounted care. If “Yes,” indicate the eligibility criteria
explained in the FAP by checking all applicable boxes. If the FAP
describes information that doesn't have a corresponding
checkbox, check line 13h, “Other,” and describe this information
in Part V, Section C.

Line 16. Answer “Yes,” if, during the tax year, the FAP was
widely publicized within the community served by the hospital
facility. If “Yes,” indicate how the hospital facility publicized the
policy by checking all applicable boxes. If the hospital facility
publicized the policy within the community served by the hospital
facility by means that aren't listed on lines 16a–16i, check
line 16j, “Other,” and describe in Part V, Section C, how the FAP
was publicized within the community served by the hospital
facility.

Line 13a. See the instructions for Part I, line 3a of Schedule H
(Form 990), for the definition of “Federal Poverty Guidelines”
(FPG). Check this box if, during the tax year, the hospital
facility had a written FAP that used FPG for determining
eligibility for free or discounted medical care. Show the specific
threshold by writing in the percentage amount. If the hospital
facility used FPG for determining eligibility for free or discounted
medical care, but not both free and discounted medical care,
enter “000” in the percentage amount for which FPG wasn't
used.

Line 16g. Check this box if individuals were notified about the
FAP by being offered a paper copy of the plain language
summary of the FAP, by receiving a conspicuous written notice
about the FAP on their billing statements, and via conspicuous
public displays or other measures reasonably calculated to
attract patients' attention.

Line 13b. Check this box if the hospital facility used an income
level other than FPG and explain in Part V, Section C, what
criteria the hospital facility used to determine eligibility for free or
discounted care (including whether the hospital facility used the
income level of patients, patients’ families, or patients’
guarantors as a factor).

Line 16i. Check this box if the FAP, FAP application form, and
plain language summary of the FAP were translated into the
primary language(s) spoken by Limited English Proficient (LEP)
populations, such as by translating these documents into the
language(s) spoken by each LEP language group that
constitutes the lesser of 1,000 individuals or 5% of the
community served by the hospital facility or the population likely
to be affected or encountered by the hospital facility.

Line 13c. Check this box if the hospital facility used the asset
level of patients, patients' families, or patients' guarantors as a
factor in determining eligibility for financial assistance.

Line 16j. “Other” measures to publicize the policy within the
community served by the hospital facility may include, but
aren't limited to, having registration personnel refer uninsured
and/or low-income patients to financial counselors to discuss the
policy. Check the box for line 16j if, instead of the detailed policy,
the hospital facility provided a summary of the policy in a manner
listed in lines 16a–16i.

Line 13d. Check this box if the hospital facility considered
whether patients were “medically indigent,” as defined in the
instructions for Part I, line 4 of Schedule H (Form 990), in
determining eligibility for financial assistance.
Line 13e. Check this box if the hospital facility used the
insurance status of patients, patients' families, or patients'
guarantors as a factor in determining eligibility for financial
assistance.

Line 17. Answer “Yes,” if, during the tax year, the hospital
facility had either a separate written billing and collections
policy or a written FAP that described any actions that the
hospital facility (or other authorized party) may take related to
obtaining payment of a bill for medical care, including, but not
limited to, any extraordinary collection actions (ECAs); the
process and time frames the hospital facility (or other authorized
party) uses in taking those actions (including, but not limited to,

Line 13g. Check this box if the hospital facility considered
residency as a factor in determining eligibility for financial
assistance.

Instructions for Schedule H

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the reasonable efforts it will make to determine whether an
individual is FAP-eligible before engaging in ECAs); and the
office, department, committee, or other body with the final
authority or responsibility for determining that the hospital facility
has made reasonable efforts to determine whether an individual
is FAP-eligible and may therefore engage in ECAs against the
individual.

Line 19. Indicate any of the actions against an individual that
the hospital facility took during the tax year before making
reasonable efforts to determine the individual's eligibility under
the facility's FAP by checking all applicable boxes. For purposes
of this question, actions against an individual include actions to
obtain payment for the care against any other individual who has
accepted or is required to accept responsibility for the
individual’s hospital bill for the care, and actions of the hospital
facility include actions of any purchaser of the individual’s debt,
any debt collection agency or other party to which the hospital
facility has referred the individual’s debt, or any substantially
related entity.

Lines 18 and 19. “Other similar actions” don't include sending
the patient a bill.

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Note. Section 501(r)(6) requires a hospital facility to forego
ECAs before the facility has made reasonable efforts to
determine the individual's eligibility under the facility's FAP.

Line 19a. Check this box if the hospital facility reported adverse
information about the individual to consumer credit reporting
agencies or credit bureaus before making reasonable efforts to
determine the individual's eligibility under the facility's FAP.

Line 18. Indicate what actions against an individual the
hospital facility was permitted to take during the tax year under
its policies before making reasonable efforts to determine the
individual's eligibility under the facility's FAP by checking all
applicable boxes.

Line 19b. Check this box if the hospital facility sold an
individual's debt to another party before making reasonable
efforts to determine the individual's eligibility under the facility's
FAP. Don't check the box if, prior to the sale, the hospital facility
entered into a legally binding written agreement with the
purchaser of the debt pursuant to which the purchaser is
prohibited from engaging in any ECAs to obtain payment for the
care; the purchaser is prohibited from charging interest on the
debt in excess of the rate in effect under section 6621(a)(2) at
the time the debt is sold; the debt is returnable to or recallable by
the hospital facility upon a determination by the hospital facility
or the purchaser that the individual is FAP-eligible; and, if the
individual is determined to be FAP-eligible and the debt isn't
returned to or recalled by the hospital facility, the purchaser is
required to adhere to procedures specified in the agreement that
ensure that the individual doesn't pay, and has no obligation to
pay, the purchaser and the hospital facility together more than
the individual is personally responsible for paying as an
FAP-eligible individual.

Line 18a. Check this box if the FAP permitted reporting adverse
information about the individual to consumer credit reporting
agencies or credit bureaus.
Line 18b. Check this box if the FAP permitted selling an
individual's debt to another party. Don't check the box if, prior to
the sale, the hospital facility entered into a legally binding written
agreement with the purchaser of the debt pursuant to which the
purchaser is prohibited from engaging in any ECAs to obtain
payment for the care; the purchaser is prohibited from charging
interest on the debt in excess of the rate in effect under section
6621(a)(2) at the time the debt is sold; the debt is returnable to
or recallable by the hospital facility upon a determination by the
hospital facility or the purchaser that the individual is
FAP-eligible; and, if the individual is determined to be
FAP-eligible and the debt isn't returned to or recalled by the
hospital facility, the purchaser is required to adhere to
procedures specified in the agreement that ensure that the
individual doesn't pay, and has no obligation to pay, the
purchaser and the hospital facility together more than the
individual is personally responsible for paying as an FAP-eligible
individual.

Line 19c. Check this box if the hospital facility deferred or
denied, or required a payment before providing, medically
necessary care because of an individual’s nonpayment of one or
more bills for previously provided care covered under the
hospital facility’s FAP.

Line 18c. Check this box if the FAP permitted deferring or
denying, or requiring a payment before providing, medically
necessary care because of an individual’s nonpayment of one or
more bills for previously provided care covered under the
hospital facility’s FAP.

Line 19d. Check this box if the hospital facility took legal action
or pursued a judicial process, including but not limited to placing
a lien on an individual's real property; attaching or seizing an
individual's bank account or any other personal property;
commencing a civil action against an individual; causing an
individual's arrest; causing an individual to be subject to a writ of
body attachment; or garnishing an individual's wages. Don't
include any liens that a hospital facility is entitled to assert under
state law on the proceeds of a judgment settlement, or
compromise owed to an individual (or the individual’s
representative) as a result of personal injuries for which the
hospital facility provided care and if it filed a claim in a
bankruptcy proceeding.

Line 18d. Check this box if the FAP permitted actions that
require a legal or judicial process, including but not limited to
placing a lien on an individual's real property; attaching or
seizing an individual's bank account or any other personal
property; commencing a civil action against an individual;
causing an individual's arrest; causing an individual to be subject
to a writ of body attachment; or garnishing an individual's wages.
Don't include any liens that a hospital facility is entitled to assert
under state law on the proceeds of a judgment, settlement, or
compromise owed to an individual (or the individual’s
representative) as a result of personal injuries for which the
hospital facility provided care and if it files a claim in a
bankruptcy proceeding.

Line 19e. If the hospital facility took an action or actions against
an individual during the tax year similar to those listed in lines
19a through 19d before making reasonable efforts to determine
the individual's eligibility under the facility's FAP, check line 19e,
“Other similar actions,” and describe those actions in Part V,
Section C.

Line 18e. If a hospital facility's policies permitted the facility to
take an action or actions against an individual during the tax year
similar to those listed on lines 18a through 18d before making
reasonable efforts to determine the individual's eligibility under
the facility's FAP, check line 18e, “Other similar actions,” and
describe those actions in Part V, Section C.

Line 20. Indicate which efforts the hospital facility or other
authorized party made before initiating any of the actions listed
(whether or not checked) on lines 19a through 19d or described
in Part V, Section C (describing “other similar actions” checked
on line 18e or line 19e) by checking all applicable boxes on lines
20a through 20d. If the hospital facility made efforts other than
those listed on lines 20a through 20d before initiating any of the

Line 18f. If the hospital facility was permitted to make no such
actions, check the box for line 18f, “None of these actions or
similar actions were permitted.”
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Instructions for Schedule H

absence of immediate medical attention could reasonably be
expected to result in:
1. Placing the health of the individual (or, for a pregnant
woman, the health of the woman or the unborn child) in serious
jeopardy,
2. Serious impairment to bodily functions, or
3. Serious dysfunction of any bodily organ or part; or

actions listed on lines 19a through 19d or described in Part V,
Section C (describing "other similar actions" checked on line 18e
or line 19e), check the box for line 20e, “Other,” and describe in
Part V, Section C.
If the hospital facility made no such efforts before initiating
any of the actions listed (whether or not checked) on lines 19a
through 19d or described in Part V, Section C (describing “other
similar actions” checked on line 18e or line 19e), check the box
for line 20f, “None of these efforts were made.”

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(b) For a pregnant woman who is having contractions:
1. That there is inadequate time to effect a safe transfer to
another hospital before delivery, or
2. That transfer may pose a threat to the health or safety of
the woman or the unborn child.

Line 20a. Check this box if the hospital facility or other
authorized party provided individuals with a written notice that
indicated financial assistance is available for eligible individuals,
identified the ECA(s) that the hospital facility (or other authorized
party) intended to initiate to obtain payment for the care, and
stated a deadline after which such ECA(s) may be initiated that
was no earlier than 30 days after the date that the written notice
was provided, along with a plain language summary of the FAP. If
not, describe in Section C.

Lines 22–24. For purposes of lines 22–24, the term
“FAP-eligible” means eligible for assistance under the hospital
facility's FAP.
Line 22. Indicate how the hospital facility determined, during the
tax year, the maximum amounts that can be charged to
FAP-eligible individuals for emergency or other medically
necessary care by checking the appropriate box.

Line 20b. Check this box if the hospital facility or other
authorized party made a reasonable effort to orally notify
individuals about the hospital facility’s FAP and about how the
individual may obtain assistance with the FAP application
process at least 30 days before initiating ECAs. If not, describe in
Section C.

Note. Under section 501(r)(5), the maximum amounts that can
be charged to FAP-eligible individuals for emergency or other
medically necessary care are the amounts generally billed to
individuals who have insurance covering such care.

Line 20c. Check this box if (1) when an individual who
submitted an incomplete FAP application during the application
period, the hospital facility or other authorized party notified the
individual about how to complete the FAP application and gave
the individual a reasonable opportunity to do so in accordance
with Regulations section 1.501(r)-6(c)(5); and (2) when an
individual who submitted a complete FAP application during the
application period, the hospital facility or other authorized party
determined whether the individual is FAP-eligible for the care
and otherwise met the requirements described in Regulations
section 1.501(r)-6(c)(6). If not, describe in Section C.

Line 23. Answer “Yes,” if, during the tax year, the hospital
facility charged any FAP-eligible individual to whom the hospital
facility provided emergency or other medically necessary
services more than the amounts generally billed to individuals
who had insurance covering such care. If “Yes,” explain in Part V,
Section C, except as provided in the next paragraph.
The hospital facility may check “No” if it charged more than
the amounts generally billed to individuals who had insurance
covering such care to an individual if the charge in excess of
amounts generally billed (AGB) wasn't made or requested as a
pre-condition of providing medically necessary care to the
FAP-eligible individual; as of the time of the charge, the
FAP-eligible individual hadn't submitted a complete FAP
application and hadn't otherwise been determined by the
hospital facility to be FAP-eligible for the care; and, if the
individual subsequently submits a complete FAP application and
is determined to be FAP-eligible for the care, the hospital facility
refunds any amount that exceeds the amount the individual is
determined to be personally responsible for paying as an
FAP-eligible individual, unless such excess amount is less than
$5.

Line 20d. Check this box if the hospital facility or other
authorized party made presumptive eligibility determinations in
accordance with Regulations section 1.501(r)-6(c)(2). If not,
describe in Section C.
Line 21. Answer “Yes,” if, during the tax year, the hospital
facility had in place a written policy about emergency medical
care that required the hospital facility to provide, without
discrimination, care for emergency medical conditions to
individuals without regard to their eligibility under the hospital
facility's FAP. A hospital facility's emergency medical care policy
doesn't meet this requirement unless it prohibits the hospital
facility from engaging in actions that discourage individuals from
seeking emergency medical care, such as by demanding that
emergency department patients pay before receiving treatment
for emergency medical conditions or by permitting debt
collection activities that interfere with the provision, without
discrimination, of emergency medical care. If “No,” indicate the
reasons why the hospital facility didn't have a written
nondiscriminatory policy relating to emergency medical care by
checking all applicable boxes. If the reason the hospital facility
didn't have a written nondiscriminatory policy relating to
emergency medical care isn't listed in lines 21a through 21c,
check line 21d, “Other,” and describe the reason(s) in Part V,
Section C.
The hospital facility may check “Yes” if it had a written policy
that required compliance with 42 U.S.C. 1395dd (Emergency
Medical Treatment and Active Labor Act (EMTALA)).
For purposes of line 21, the term “emergency medical
conditions” means:
(a) A medical condition manifesting itself by acute symptoms
of sufficient severity (including severe pain) such that the
Instructions for Schedule H

Line 24. Answer “Yes,” if, during the tax year, the hospital
facility charged any FAP-eligible individual an amount equal to
the gross charge for any service provided to that individual, and
explain in Part V, Section C, the circumstances in which it used
gross charges. A bill that itemizes a reduction applied to a gross
charge for a service doesn't need to be reported if the amount
charged to the individual for such service is less than the amount
of the gross charge.
The hospital facility may check “No” if it charged gross
charges for any medical care covered under the FAP if the
charge in excess of AGB wasn't made or requested as a
pre-condition of providing medically necessary care to the
FAP-eligible individual; as of the time of the charge, the
FAP-eligible individual hadn't submitted a complete FAP
application and hadn't otherwise been determined by the
hospital facility to be FAP-eligible for the care; and, if the
individual subsequently submits a complete FAP application and
is determined to be FAP-eligible for the care, the hospital facility
refunds any amount that exceeds the amount the individual is
determined to be personally responsible for paying as an
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• Line 18e: If the organization checked line 18e, describe the
other similar actions that the hospital facility was permitted to
take under its policies during the tax year before making
reasonable efforts to determine the individual's eligibility under
the facility's FAP.
• Line 19e: If the organization checked line 19e, describe the
other similar actions that the hospital facility was permitted to
take under its policies during the tax year before making
reasonable efforts to determine the individual's eligibility under
the facility's FAP.
• Line 20e: If the organization checked line 20e, describe the
other efforts that the hospital facility made.
• Line 21c: If the organization checked line 21c, describe how
the hospital facility limited who was eligible to receive care for
emergency services.
• Line 21d: If the organization checked line 21d, describe the
other reasons why the hospital facility didn't have a written
nondiscriminatory policy for emergency medical care.
• Line 23: If the organization checked “Yes” to line 23, explain
the circumstances in which the hospital facility charged any
FAP-eligible individual more than the amounts generally billed to
individuals who had insurance covering such care.
• Line 24: If the organization answered “Yes” to line 24, explain
the circumstances in which the hospital facility charged any
FAP-eligible individual an amount equal to the gross charge for
any service provided to that individual.

FAP-eligible individual, unless such excess amount is less than
$5.

Section C

Use Section C to provide descriptions required for Part V,
Section B, lines 2, 3e, 3j, 5, 6a, 6b, 7d, 11, 13b, 13h, 15e, 16j,
18e, 19e, 20a, 20b, 20c, 20d, 20e, 21c, 21d, 23, and 24, as
applicable. Complete a separate Section C for each hospital
facility or facility reporting group for which the organization
completed Section B; complete one Section C for each
Section B.

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If completing Section C for a single hospital facility, identify
the specific name and line number (from Schedule H (Form
990), Part V, Section A) of the hospital facility to which the
responses in Section C relate.

If completing Section C for a facility reporting group, list the
reporting group letter, then list each hospital facility in that group
separately by name and line number (from Section A). For each
hospital facility, provide the descriptions required for Part V,
Section B, lines 2, 3j, 5, 6a, 6b, 7d, 11, 13b, 13h, 15e, 16j, 18e,
19e, 20a, 20b, 20c, 20d, 20e, 21c, 21d, 23, and 24. If applicable,
provide separate descriptions for each hospital facility in a facility
reporting group, designated by facility reporting group letter and
hospital facility line number from Part V, Section A (“A, 1,” “A, 4,”
“B, 2,” “B, 3,” etc.), and name of hospital facility.

Section D

• Line 2: If the organization checked “Yes,” provide details

Complete Part V, Section D, by listing all of the non-hospital
health care facilities that the organization operated during the
tax year. A facility is operated by an organization whether it is
operated directly by the organization or through a disregarded
entity or joint venture treated as a partnership. List each of
these facilities in order of size from largest to smallest, measured
by a reasonable method (for example, the number of patients
served or total revenue per facility). For each non-hospital health
care facility, list its name and address and describe the type of
facility. These types of facilities may include, but aren't limited to,
rehabilitation and other outpatient clinics, diagnostic centers,
mobile clinics, and skilled nursing facilities.

regarding the hospital facility(ies) acquired or placed into
service as a tax-exempt hospital in the current tax year or the
immediately preceding tax year.
• Line 3j: If the organization checked line 3j, describe the other
content included in the hospital facility's CHNA report.
• Line 5: If the organization checked “Yes,” summarize, in
general terms, how and over what time period such input was
provided (for example, whether through meetings, focus groups,
interviews, surveys, or written comments, and between what
dates); the names of any organizations providing input; and
describe the medically underserved, low-income, or minority
populations being represented by organizations or individuals
that provided input. A CHNA report doesn't need to name or
otherwise identify any specific individual providing input on the
CHNA. In the event a hospital facility solicits, but cannot obtain,
input from a source required by line 5, the hospital facility's
CHNA report must also describe the hospital facility's efforts to
solicit input from such source.
• Line 6a: If the organization checked “Yes,” list the other
hospital facilities with which the hospital facility conducted its
CHNA.
• Line 6b: If the organization checked “Yes,” list the
organizations other than hospital facilities with which the hospital
facility conducted its CHNA.
• Line 7d: If the organization checked line 7d, describe the other
means that the hospital facility used to make its CHNA widely
available.
• Line 11: Describe how the hospital facility is addressing the
significant health needs identified in its most recently conducted
CHNA and any such needs that aren't being addressed together
with the reasons why such needs aren't being addressed.
• Line 13b: Describe the criteria the hospital facility used to
determine eligibility for free or discounted care (including
whether the hospital facility used the income level of patients,
patients’ families, or patients’ guarantors as a factor).
• Line 13h: If the organization checked line 13h, describe the
other eligibility criteria used.
• Line 15e: If the organization checked line 15e, describe the
other methods for applying for financial assistance.
• Line 16j: If the organization checked line 16j, describe other
ways that the hospital facility publicized its FAP.

List the total number of non-hospital health care facilities that
the organization operated during the tax year.
If the organization needs additional space to list all of its
non-hospital health care facilities, it should duplicate Section D
and use as many duplicate copies of Section D as needed,
number each page, and renumber the line numbers in the
left-hand margin (for example, an organization with 15 such
facilities should renumber lines 1–5 on the 2nd page as lines 11–
15).

• Line 2: If the organization checked “Yes,” provide details
regarding the hospital facility(ies) acquired or placed into
service as a tax-exempt hospital in the current tax year or the
immediately preceding tax year.
• Line 3j: If the organization checked line 3j, describe the other
content included in the hospital facility's CHNA report.
• Line 5: If the organization checked “Yes,” summarize, in
general terms, how and over what time period such input was
provided (for example, whether through meetings, focus groups,
interviews, surveys, or written comments, and between what
dates); the names of any organizations providing input; and
describe the medically underserved, low-income, or minority
populations being represented by organizations or individuals
that provided input. A CHNA report doesn't need to name or
otherwise identify any specific individual providing input on the
CHNA. In the event a hospital facility solicits, but cannot obtain,
input from a source required by line 5, the hospital facility's
CHNA report must also describe the hospital facility's efforts to
solicit input from such source.
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Instructions for Schedule H

• Line 6a: If the organization checked “Yes,” list the other
hospital facilities with which the hospital facility conducted its
CHNA.
• Line 6b: If the organization checked “Yes,” list the
organizations other than hospital facilities with which the hospital
facility conducted its CHNA.
• Line 7d: If the organization checked line 7d, describe the other
means that the hospital facility used to make its CHNA widely
available.
• Line 11: Describe how the hospital facility is addressing the
significant health needs identified in its most recently conducted
CHNA and any such needs that aren't being addressed together
with the reasons why such needs aren't being addressed.
• Line 13b: Describe the criteria the hospital facility used to
determine eligibility for free or discounted care (including
whether the hospital facility used the income level of patients,
patients’ families, or patients’ guarantors as a factor).
• Line 13h: If the organization checked line 13h, describe the
other eligibility criteria used.
• Line 15e: If the organization checked line 15e, describe the
other methods for applying for financial assistance.
• Line 16j: If the organization checked line 16j, describe other
ways that the hospital facility publicized its FAP.
• Line 18e: If the organization checked line 18e, describe the
other similar actions that the hospital facility was permitted to
take under its policies during the tax year before making
reasonable efforts to determine the individual's eligibility under
the facility's FAP.
• Line 19e: If the organization checked line 19e, describe the
other similar actions that the hospital facility was permitted to
take under its policies during the tax year before making
reasonable efforts to determine the individual's eligibility under
the facility's FAP.
• Line 20e: If the organization checked line 20e, describe the
other efforts that the hospital facility made.
• Line 21c: If the organization checked line 21c, describe how
the hospital facility limited who was eligible to receive care for
emergency services.
• Line 21d: If the organization checked line 21d, describe the
other reasons why the hospital facility didn't have a written
nondiscriminatory policy for emergency medical care.
• Line 23: If the organization checked “Yes” to line 23, explain
the circumstances in which the hospital facility charged any
FAP-eligible individual more than the amounts generally billed to
individuals who had insurance covering such care.
• Line 24: If the organization answered “Yes” to line 24, explain
the circumstances in which the hospital facility charged any
FAP-eligible individual an amount equal to the gross charge for
any service provided to that individual.

Part I, line 3c. If applicable, describe the criteria used for
determining eligibility for free or discounted care under the
organization's FAP. Also, describe whether the organization uses
an asset test or other threshold, regardless of income, to
determine eligibility for free or discounted care.
Part I, line 6a. If the organization's community benefit report
is in a report prepared by a related organization, and not in a
separate report prepared by the organization, identify the related
organization and list its EIN.
Part I, line 7g. If applicable, describe if the organization
included as subsidized health services any costs attributable to
a physician clinic, and enter such costs the organization
included.
Part I, line 7, column (f). If applicable, enter the bad debt
expense included in Form 990, Part IX, line 25, column (A) (but
subtracted for purposes of calculating the percentages in this
column).
Part I, line 7. Provide an explanation of the costing
methodology used to calculate the amounts entered for each line
in the table. If a cost accounting system was used, indicate
whether the cost accounting system addresses all patient
segments (for example, inpatient, outpatient, emergency room,
private insurance, Medicaid, Medicare, uninsured, or self pay).
Also, indicate if a cost-to-charge ratio was used for any of the
figures in the table. Describe whether this cost-to-charge ratio
was derived from Worksheet 2, Ratio of Patient Care
Cost-to-Charges, and, if not, what kind of cost-to-charge ratio
was used and how it was derived. If some other costing
methodology was used besides a cost accounting system,
cost-to-charge ratio, or a combination of the two, describe the
method used.
Part II. Describe how the organization’s community building
activities, as reported in Part II, promote the health of the
community or communities the organization serves.
Part III, line 2. Describe the methodology used to determine
the amount on Part III, line 2, including how the organization
accounts for discounts and payments on patient accounts in
determining bad debt expense.
Part III, line 3. Describe the methodology used to determine
the amount entered on line 3. Also, describe the rationale, if any,
for including any portion of bad debt as community benefit.
Part III, line 4. Provide, if applicable, the text of the footnote
to the organization's financial statements that describes bad
debt expense, or enter the page number(s) of the organization's
most recent audited financial statements on which the
footnote appears. If the organization's financial statements
include a footnote on these issues that also includes other
information, enter only the relevant portions of the footnote. If the
organization's financial statements don't contain such a footnote,
enter that the organization's financial statements don't 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 entered on Part III,
line 6. Describe, if applicable, the extent to which any shortfall
entered on 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 in the policy that apply to patients who it
knows qualify for financial assistance, whether the practices
apply specifically to such patients or also cover other types of
patients.

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Part VI. Supplemental Information
Use Part VI to provide the narrative explanations required by
the following questions, and to supplement responses to other
questions on Schedule H (Form 990). In addition, use Part VI to
make disclosures described in section 7 of Rev. Proc. 2015-21.
Identify the specific part, section, and line number that the
response supports, in the order in which they appear on
Schedule H (Form 990). Part VI can be duplicated if more space
is needed.
Rev. Proc. 2015-21, 2015-13 I.R.B. 817, provides guidance
regarding correction and disclosure procedures for hospital
organizations to follow so that certain failures to meet the
requirements of section 501(r) will be excused for purposes of
sections 501(r)(1) and 501(r)(2)(B). Section 7 of the revenue
procedure provides that certain information must be disclosed
on the organization’s Form 990. Provide this information in Part
VI.

Line 2. If applicable, describe whether and how the organization
assesses the health care needs of the community or
communities it serves, in addition to any CHNA entered in Part V,
Section B.

Line 1. Provide the following supplemental information.
Instructions for Schedule H

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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 FAP. For example, enter
whether the organization posts its FAP, or a summary thereof,
applications for financial assistance, 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, applications for financial assistance, and
financial assistance contact information to patients as part of the
intake process; provides a copy of the policy, or a summary
thereof, applications for financial assistance, and financial
assistance contact information to patients with discharge
materials; includes the policy, or a summary thereof, an
application for financial assistance, and 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.

Worksheet 1. Financial Assistance at
Cost (Part I, Line 7a)

Worksheet 1 can be used to calculate the organization's financial
assistance (sometimes referred to as “charity care”) at cost
entered on Part I, line 7a. Refer to instructions for Part I, line 1,
for the definition of “financial assistance.”

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Line 1. Enter the gross patient charges written off to financial
assistance pursuant to the organization's financial assistance
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 method to
estimate financial assistance cost. An organization that doesn't
use Worksheet 2 to determine a ratio of patient care cost to
charges should make any necessary adjustments for patient
care charges and community benefit programs to avoid double
counting.

Line 4. Describe the community or communities the
organization serves, taking into account the geographic service
area(s) (urban, suburban, rural, etc.), the demographics of the
community or communities (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 4. Enter the Medicaid/provider taxes, fees, and
assessments 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 financial assistance. If the payments are primarily
intended to offset the cost of Medicaid services, then enter this
amount in Worksheet 3, line 4, column (A). If the primary
purpose of the taxes or payments hasn't been made clear by
state regulation or law, then the organization can allocate the
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 financial assistance
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
(portions of the cost of the tax are generally promised back to
organizations either through an increase in the Medicaid
reimbursement rate or through direct appropriation).

Line 5. 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. Your response should include, but
need not be 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 independent contractors of
the organization, nor family members thereof;
• The organization extends medical staff privileges to all
qualified physicians in its community for some or all of its
departments or specialties; and
• How the organization applies surplus funds to improvements
in facilities and equipment, patient care, medical training,
education, and research.

Line 6. “Revenue from uncompensated care pools or programs”
means payments received from a state, including Upper
Payment Limit (UPL) funding and Medicaid DSH funds, as direct
offsetting revenue for financial assistance or to enhance
Medicaid reimbursement rates. If such payments are primarily to
offset the cost of Medicaid services, then enter this amount in
Worksheet 3, line 7, column (A). If the primary purpose of the
payments hasn't been made clear by state regulation or law, then
the organization can allocate the 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 financial assistance and Medicaid, respectively.

Line 6. If the organization is part of an affiliated health care
system, describe the 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 7. Identify all states with which the organization files (or a
related organization files on its behalf) a community benefit
report. Enter 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.

Line 7. Include the amount of any other offsetting revenue,
including any restricted grants received by the organization.

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Instructions for Schedule H

Worksheet 1. Financial Assistance at Cost (Part I, line 7a)

Keep for Your Records

Gross patient charges
1. Amount of gross patient charges written off under financial assistance policies . . . . . . . . . . . .

1.

Total community benefit expense

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2. Ratio of patient care cost to charges (from Worksheet 2, if used) . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Estimated cost (multiply line 1 by line 2, or obtain from cost accounting) . . . . . . . . . . . . . . . . .

3.

4. Medicaid provider taxes, fees, and assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Total community benefit expense (add lines 3 and 4; enter in Part I, line 7a, column
(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

Direct offsetting revenue

6. Revenue from uncompensated care pools or programs

..............................

6.

7. Other direct offsetting revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Total direct offsetting revenue (add lines 6 and 7; enter in Part I, line 7a, column (d)) . . . . .

8.

9. Net community benefit expense (subtract line 8 from line 5; enter in Part I, line 7a,
column (e)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

10. Total expense (enter amount from Form 990, Part IX, line 25, column (A), including the
organization's share of joint venture expenses, and excluding any bad debt expense included
on Part IX, line 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Percent of total expense
(divide line 9 by line 10; enter in Part I, line 7a, column (f)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

Worksheet 2. Ratio of Patient Care
Cost to Charges

expenditure isn't double-counted when the ratio of patient care
cost to charges is applied.
Line 4. Enter the sum of the total community benefit expenses
included in “Total operating expense” on line 1 and entered in
Part I, lines 7e, 7f, 7h, and 7i, column (c), so these expenses
aren't double-counted when the ratio of patient care cost to
charges is applied.
Also, include on line 4 the total community benefit expense
entered in Part I, lines 7a, 7b, 7c, and 7g, column (c), if the
organization hasn't 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 financial assistance,
Medicaid or other means-tested government programs, or
subsidized health services.

Worksheet 2 can be used to calculate the organization's ratio of
patient care cost to charges. An organization that doesn't use
Worksheet 2 to determine a ratio of patient care cost to charges
should make any necessary adjustments for patient care
charges and community benefit programs to avoid double
counting.

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 doesn't include any total
community benefit expense entered 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 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 hasn't
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 on line 9.

Line 3. Enter the Medicaid provider taxes, fees, and
assessments paid by the organization included on line 1 so this

Instructions for Schedule H

%

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Worksheet 2. 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

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2. Nonpatient care activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Medicaid provider taxes, fees, and assessments . . . . . . . . . . . . . . . . .

3.

4. Total community benefit expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Total community building expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

6. Total adjustments (add lines 2 through 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Adjusted patient care cost (subtract line 6 from line 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

Patient care charges

8. Gross patient charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

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 cost to charges

11. Ratio of patient care cost to charges (divide line 7 by line 10; enter on the applicable lines of
Worksheets 1, 3, or 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Worksheet 3. Medicaid and Other
Means-Tested Government Health
Programs (Part I, Lines 7b and 7c)

11.

%

reimbursements can enter 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 health 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
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.

Worksheet 3 can be used to report the cost of Medicaid and
other means-tested government health programs. A
“means-tested government program” is a government health
program for which eligibility depends on the recipient's income or
asset level.
“Medicaid” means the United States health program for
individuals and families with low incomes and resources. “Other
means-tested government programs” means
government-sponsored health programs where eligibility for
benefits or coverage is determined by income or assets.
Examples include:
• The State Children's Health Insurance Program (SCHIP), a
United States federal government program that gives funds to
states in order to provide health insurance to families with
children; and
• Other federal, state, or local health care programs.
Report Medicaid and other means-tested government
program revenues and expenses from all states, not just from the
organization's home state.

Line 3, column (B). Enter the estimated cost for services
provided to patients who receive health benefits from other
means-tested government health programs.
Line 4, column (A). Enter the Medicaid provider taxes, fees,
and assessments paid by the organization if payments received
from an uncompensated care pool, UPL program, 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 financial
assistance, then enter this amount on Worksheet 1, line 4. If the
primary purpose of such taxes or payments hasn't been made
clear by state regulation or law, then the organization can

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 aren't distinguishable
from regular Medicaid reimbursements. Hospitals that cannot
distinguish their SCHIP reimbursements from their Medicaid
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Instructions for Schedule H

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 financial assistance and Medicaid, respectively.

way the Medicaid program that provides reimbursement
classifies the funds.
Line 7, column (A). Enter revenue received from
uncompensated care pools or programs if payments received
from an uncompensated care pool, UPL program, 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 enter this amount on Worksheet 1, line 6. If the primary
purpose of such payments hasn't been made clear by state
regulation or law, then the organization can allocate the
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 financial assistance 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. Don't include
Medicaid reimbursement for direct graduate medical education
(GME) costs, which should be entered 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 entered on
Worksheet 5, line 10. Also, include Medicaid DSH revenue and
UPL funding. “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 for services performed during
prior years.
Organizations can describe in Part VI the amount of prior year
Medicaid revenue included on Part I, line 7b.
Amounts received from a Medicaid program as
“reimbursement for direct GME” or IME should be treated the

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Worksheet 3. Medicaid and Other Means-Tested Government
Health Programs (Part I, lines 7b and 7c)

Keep for Your Records

(B)
Other
means-tested
government health
programs

(A)
Medicaid

Gross patient charges

1. Gross patient charges from the programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

Total community benefit expense
2. Ratio of patient care cost to charges (from Worksheet 2, if used) . . . . . . . . . . . . . .

2.

3. Cost (multiply line 1 by line 2, or obtain from cost accounting)

................

3.

4. Medicaid provider taxes, fees, and assessments . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Total community benefit expense Total community benefit expense (add lines 3
and 4; enter amount from column (A) in Part I, line 7b, column (c); and enter amount
from column (B) in 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) in Part I, line 7b, column (d), and enter amount from column (B) in Part I, line 7c,
column (d)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

10. Net community benefit expense (subtract line 9 from line 5; enter amount from
column (A) in Part I, line 7b, column (e); enter amount from column (B) in Part I,
line 7c, column (e)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Total expense (enter amount from Form 990, Part IX, line 25, column (A), including
the organization's share of joint venture expenses, and excluding any bad debt
expense included in Part IX, line 25, in both columns (A) and (B)) . . . . . . . . . . . . .

11.

12. Percent of total expense (line 10 divided by line 11; enter amount from column (A)
in Part I, line 7b, column (f); enter amount from column (B) in Part I, line 7c, column
(f)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

Instructions for Schedule H

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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

1.

2.
3.

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Community health improvement services
a.

1a.

b.

1b.

c.

1c.

d.

1d.

e.

1e.

f.

1f.

g.

1g.

h.

1h.

i.

1i.

j.

1j.

Worksheet subtotal (add lines 1a through 1j) . . . . . . . . . . . . . . . . . . .

2.

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) in Part I, line 7e, columns (c), (d), and (e),
respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

Total expense (enter amount from Form 990, Part IX, line 25, column
(A), including the organization's share of joint venture expenses, and
excluding any bad debt expense included on Part IX, line 25) . . . . . .

6.

Percent of total expense (line 5, column (C) divided by line 6; enter
amount in Part I, line 7e, column (f)) . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

6.

7.

(B)
Direct
offsetting
revenue

(C)
Net
community
benefit
expense
(subtract col.
(B) from col. (A)
for lines 1–5)

Worksheet 4. Community Health
Improvement Services and
Community Benefit Operations (Part I,
Line 7e)

“Community health improvement services” means activities or
programs, subsidized by the health care organization, carried out
or supported for the express purpose of improving community
health. Such services don't generate inpatient or outpatient
revenue, although there may be a nominal patient fee or sliding
scale fee for these services.
“Community benefit operations” means:

Worksheet 4 can be used to report the net cost of community
health improvement services and community benefit operations.

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Instructions for Schedule H

• Activities associated with conducting community health needs
assessments,
• Community benefit program administration, and
• The organization's activities associated with fundraising or
grant writing for community benefit programs.

Worksheet 5. Health Professions
Education (Part I, Line 7f)

Worksheet 5 can be used to report the net cost of health
professions education.

Activities or programs cannot be reported if they are provided
primarily for marketing purposes or if they are more beneficial to
the organization than to the community. For example, the activity
or program may not be reported if it is designed primarily to
increase referrals of patients with third-party coverage, required
for license or accreditation, except when responding to a
community health need, enhancing public health, or relieving the
burden of government to improve health or restricted to
individuals affiliated with the organization (employees and
physicians of the organization).

“Health professions education” means educational programs
that result in a degree, a 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 doesn't include education or training programs
available exclusively to the organization's employees and
medical staff or scholarships provided to those individuals.
However, it does include education programs if the primary
purpose of such programs is to educate health professionals in
the broader community. Costs for medical residents and interns
can be included, even if they are considered “employees” for
purposes of Form W-2, Wage and Tax Statement.

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To be reported, community need for the activity or program
must be established. Community need can be demonstrated
through the following.
• A CHNA conducted or accessed by the organization.
• Documentation that demonstrated community need or a
request from a public health agency or community group was the
basis for initiating or continuing the activity or program.
• The involvement of unrelated, collaborative tax-exempt or
government organizations as partners in the activity or program
carried out for the express purpose of improving community
health.

Examples of health professions education activities or
programs that should and shouldn't be reported are as follows.
Activity or Program

Community benefit activities or programs also seek to
achieve a community benefit objective, including improving
access to health services, enhancing public health, advancing
increased general knowledge, and relief of a government burden
to improve health. This includes activities or programs that do
the following.
• Are available broadly to the public and serve low-income
consumers.
• Reduce geographic, financial, or cultural barriers to accessing
health services, and if they ceased would result in access
problems (for example, longer wait times or increased travel
distances).
• Address federal, state, or local public health priorities such as
eliminating disparities in access to health care services or
disparities in health status among different populations.
• Leverage or enhance public health department activities such
as childhood immunization efforts.
• Strengthen community health resilience by improving the
ability of a community to withstand and recover from public
health emergencies.
• Otherwise would become the responsibility of government or
another tax-exempt organization.
• Advance increased general knowledge through education or
research that benefits the public.

Example Rationale

Scholarships for
community members

Yes

More benefit to
community than
organization

Scholarships for staff
members

No

More benefit to
organization than
community

Continuing medical
education for community
physicians

Yes

Accessible to all
qualified physicians

Continuing medical
education for own
medical staff

No

Restricted to own
medical staff members

Nurse education if
graduates are free to
seek employment at any
organization

Yes

More benefit to
community than
organization

Nurse education if
graduates are required to
become the
organization's employees

No

Program designed
primarily to benefit the
organization

Lines 1 through 6. Include both direct and indirect costs. Direct
costs of health professions education don't include costs related
to Ph.D. students and post-doctoral students, which are to be
entered on Worksheet 7, Research. See the instructions for Part
I, line 7, column (c), for the definition of “indirect costs.” "Indirect
costs" don't 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:
1. Medical students;
2. Students enrolled in nursing programs that are licensed
by state law or, if licensing isn't required, accredited by the
recognized national professional organization for the particular
activity;

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 enters 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.

Instructions for Schedule H

Report

-19-

Worksheet 5. Health Professions Education (Part I, line 7f)

Keep for Your Records
Totals

Total community benefit expense
1. Medical students . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

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2. Interns, residents, and fellows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Nurses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Other allied health professions, students . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Continuing health professions education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

6. Other students . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Total community benefit expense (add lines 1 through 6; enter in Part I, line 7f,
column (c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

Direct offsetting revenue

8. Medicare reimbursement for direct GME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9. Medicaid reimbursement for direct GME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

10. Continuing health professions education reimbursement/tuition . . . . . . . . . . . . . . . . . . . . . .

10.

11. Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

12. Total direct offsetting revenue (add lines 8 through 11; enter in Part I, line 7f, column
(d)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

13. Net community benefit expense (line 7 minus line 12; enter in Part I, line 7f, column
(e)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.

14. Total expense (enter amount from Form 990, Part IX, line 25, column (A), including the
organization's share of joint venture expenses, and excluding any bad debt expense
included on Part IX, line 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

15. Percent of total expense (line 13 divided by line 14; enter amount in Part I, line 7f,
column (f)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.

3. Students enrolled in allied health professions education
programs, licensed by state law or, if licensing isn't required,
accredited by the recognized national professional organization
for the particular activity, including, but not limited to, programs in
pharmacy, occupational therapy, dietetics, and pastoral care;
and
4. 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.

%

the organization from other Medicaid net patient revenue. Don't
include indirect GME reimbursement provided by Medicaid,
which is to be entered 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 health professions
education activities associated with expenses entered on
Worksheet 5, line 7.

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. Don't
include indirect GME reimbursement provided by Medicare or
Medicaid.

Worksheet 6. Subsidized Health
Services (Part I, Line 7g)

Worksheet 6 can be used to calculate the net cost of subsidized
health services. Complete Worksheet 6 for each subsidized
health service and enter in Part I the total for all subsidized
health services combined.

Line 9. Enter Medicaid reimbursement for direct GME, including
only that portion of Medicaid GME payment equivalent to
Medicare direct GME and that can be explicitly segregated by

“Subsidized health services” means clinical services provided
despite a financial loss to the organization. The financial loss is
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Instructions for Schedule H

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.

measured after removing losses associated with bad debt,
financial assistance, Medicaid, and other means-tested
government programs. Losses attributable to these items aren't
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.

The organization cannot include on Part I, line 7h, direct or
indirect costs of research funded by an individual or an
organization that isn't a tax-exempt or government entity.
However, the organization can describe in Part VI any research it
conducts that isn't 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.

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Examples of costs of research include, but aren't limited to,
salaries and benefits of researchers and staff, including stipends
for research trainees (Ph.D. candidates or fellows); facilities for
collection and storage of research, data, and samples; animal
facilities; equipment; supplies; tests conducted for research
rather than patient care; statistical and computer support;
compliance (for example, accreditation for human subjects
protection, biosafety, Health Insurance Portability and
Accountability Act (HIPAA), etc.); and dissemination of research
results.

Subsidized health services can include qualifying inpatient
programs (for example, neonatal intensive care, addiction
recovery, and inpatient psychiatric units) and outpatient
programs (emergency and trauma services, satellite clinics
designed to serve low-income communities, and home health
programs). Subsidized health services generally exclude
ancillary services that support inpatient and ambulatory
programs such as anesthesiology, radiology, and laboratory
departments. Subsidized health services include services or
care provided at physician clinics and skilled nursing facilities if
such clinics or facilities satisfy the general criteria for subsidized
health services. An organization that includes any costs
associated with stand-alone physician clinics (not other facilities
at which physicians provide services) as subsidized health
services on Part I, line 7g, must describe that it has done so and
enter on Part VI such costs included on Part I, line 7g.

Line 1. Define direct costs under the guidelines and definitions
published by the National Institutes of Health.
Line 2. Define indirect costs under the guidelines and
definitions published by the National Institutes of Health.

Line 4. Enter license fees and royalties the organization
received during the tax year that are directly associated with
research that the organization has (in any tax year) reported on
Schedule H as community benefit.

Note. The organization can report a physician clinic as a
subsidized health service only if the organization operated the
clinic and associated hospital services at a financial loss to the
organization during the year.

Line 5. An example of “other revenue” is Medicare
reimbursement associated with any research expense reported
as community benefit.

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 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 health programs.
For column (D), enter financial assistance amounts attributable
to the subsidized health service measured by cost. Multiply
line 1 by line 2 or enter the estimated expense of each
subsidized health service based on the organization's cost
accounting. Organizations with a cost accounting system or
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.

Worksheet 8. Cash and In-Kind
Contributions for Community Benefit
(Part I, Line 7i)

Worksheet 8 can be used to report cash contributions or grants
and the cost of in-kind contributions that support financial
assistance, health professions education, and other community
benefit activities reportable on Part I, lines 7a through 7h. Report
such contributions on line 7i, and not on lines 7a through 7h.
“Cash and in-kind contributions” means contributions made
by the organization to health care organizations and other
community groups restricted, in writing, to one or more of the
community benefit activities described in the table on 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.

Worksheet 7. Research (Part I,
Line 7h)

Worksheet 7 can be used to report the cost of research
conducted by the organization.
Research means any study or investigation the goal of which
is to generate increased generalizable knowledge made
available to the public (for example, knowledge about underlying
biological mechanisms of health and disease, natural processes,
or principles affecting health or illness; evaluation of safety and
efficacy of interventions for disease such as clinical trials and
studies of therapeutic protocols; laboratory-based studies;
epidemiology, health outcomes, and effectiveness; behavioral or
sociological studies related to health, delivery of care, or
Instructions for Schedule H

Don't report as cash or in-kind contributions any payments
that the organization makes in exchange for a service, facility, or
product, or that the organization makes primarily to obtain an
economic or physical benefit; for example, payments made in
lieu of taxes that the organization makes to prevent or forestall
local or state property tax assessments, and a teaching
hospital's payments to its affiliated medical school for intern or
resident supervision services by the school's faculty members.
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Keep for Your Records

Worksheet 6. Subsidized Health Services (Part I, line 7g)
(A)
Total
subsidized
health
service
program

(B)
Bad debt

(C)
Medicaid and
other meanstested
government
health
programs

(D)
Financial
assistance

(E)
Totals
(subtract
columns (B),
(C), and (D)
from column
(A))

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Program name: ______________________________

Gross patient charges
1. Gross patient charges from program(s) . . . . . . . . .

1.

Total community benefit expense
2. Ratio of patient care cost to charges (from
Worksheet 2, if used) . . . . . . . . . . . . . . . . . . . . . .

2.

3. Total community benefit expense (multiply line 1
by line 2, or obtain from cost accounting; enter
column (E) in 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) in Part I, line 7g, column
(d)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Net community benefit expense (subtract line 6
from line 3; enter column (E) in Part I, line 7g, column
(e)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Total expense (enter amount from Form 990, Part IX,
line 25, column (A), including the organization's
share of joint venture expenses, and excluding any
bad debt expense included on Part IX,
line 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9. Percent of total expense (line 7, column (E)
divided by line 8; enter in Part I, line 7g, column
(f)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

%

%

%

%

$

%

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Instructions for Schedule H

Keep for Your Records

Worksheet 7. Research (Part I, line 7h)
Total community benefit expense

1. Direct costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2. Indirect costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

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3. Total community benefit expense (add lines 1 and 2; enter in Part I, line 7h, column
(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

Direct offsetting revenue

4. License fees and royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

6. Total direct offsetting revenue (add lines 4 and 5; enter in Part I, line 7h, column (d)) . . . . . . .

6.

7. Net community benefit expense (subtract line 6 from line 3; enter in Part I, line 7h, column
(e)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Total expense (enter amount from Form 990, Part IX, line 25, column (A), including the
organization's share of joint venture expenses, and excluding any bad debt expense included on
Part IX, line 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9. Percent of total expense
(divide line 7 by line 8; enter in Part I, line 7h, column (f)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

Worksheet 8. Cash and In-Kind Contributions for Community
Benefit
(Part I, line 7i)

Keep for Your Records

(A)
Cash contributions
1.

Total community benefit expense (enter amount from
column (C) in Part I, line 7i, column (c)) . . . . . . . . . . . . . .

1.

2.

Direct offsetting revenue (enter amount from column
(C) in 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), including the organization's share of
joint venture expenses, and excluding any bad debt
expense included on Part IX, line 25) . . . . . . . . . . . . . . . .

4.

Percent of total expense (divide line 3 by line 4; enter in
Part I, line 7i, column (f)) . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

5.

Report cash contributions and grants made by the
organization to entities and community groups that share the
organization's goals and mission. Don't report cash or in-kind
contributions contributed by employees, or emergency funds
provided by the organization to the organization's employees;
loans, advances, or contributions to the capital of another
organization that are reportable in Part X of the core Form 990;
or unrestricted grants or gifts to another organization that can, at
the discretion of the grantee organization, be used other than to
provide the type of community benefit described in the table on
Part I, line 7.

Instructions for Schedule H

%

(B)
In-kind
contributions

(C)
Total

%

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, on Part I, line 7, enter the grant
on line 7i, but don't 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.

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Index

B
Bad Debt, Medicare, & Collection
Practices 5
Worksheet (optional) 6

C

S
Supplemental Information 13

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Community Building Activities 4
Disregarded entity 4
Group return 4

F

Financial Assistance Policy 9
Policy Relating to Emergency
Medical Care 11
Hospital facilities 7
Financial Assistance and Certain
Other Community Benefits at
Cost 2
Contributions for community benefit 3

Facility Information:
CHNA 7
Community Health Needs
Assessment 7
Facility Policies & Practices:
Billing and Collections 9
Charges for Medical Care 11

M

Management Companies and Joint
Ventures 6

P

Patient Protection and Affordable
Care Act:
Hospital facilities 1
Section 501(r) of the Code 1

-24-

W

Worksheets:
1-Financial Assistance at Cost 15
2-Ratio of Patient Care Cost to
Charges 15
3-Unreimbursed Medicaid and Other
Means-Tested Government
Programs 16
4-Community Health Improvement
Services and Community Benefit
Operations 19
5-Health Professions Education 20
6-Subsidized Health Services 20
7-Research 21
8-Cash and In-Kind Contributions for
Community Benefit 23